South Orange County Blog from Bob Phillips

7 Weeks Remain To Find A Home, Claim Up To $8,000 In Tax Credits

Posted in Real estate, taxes by southorangecounty on March 9, 2010

In
November, Congress extended and expanded the First-Time Home Buyer Tax
Credit program to include a subset of “move-up” buyers — homeowners
that have owned and lived in their home for 5 of the last 8 years.

The credit ranges up to $8,000 per buyer. There’s now just 7 weeks left to take advantage.

To
be eligible, home buyers must be under contract for a new home no later
than April 30, 2010, and must be closed no later than June 30, 2010.

In addition to meeting the deadline dates, there’s a basic set of requirements to be tax credit-eligible:
    You can’t purchase the home from a parent, spouse, or child
    You can’t purchase the home from an entity in which the seller is a majority owner
    You can’t acquire the home by gift or inheritance
    Each buyer in the purchase must meet eligibility requirements
There’s other criteria, too.

For
one, the sales price on the subject property cannot exceed $800,000.
Homes sold for more than $800,000 are ineligible for the tax credit.
Furthermore, households earning more than $125,000 as single-filers, or
$225,500 for joint-filers, are ineligible.

You can read the complete eligibility requirements at the IRS website,
or, you may just find it simpler to speak with your accountant about
it. There are some nuances in qualifying for and claiming the tax
credit on your returns and getting a professional’s opinion is always
wise.

And lastly, don’t forget that government’s tax credit
program is a true tax credit. It’s not a tax deduction. This means
that a tax filer whose “normal” tax liability is $3,500 and who is
eligible for $8,000 in credit will receive a $4,500 refund from the
U.S. Treasury.

If you’re currently in the House Hunt, mark your
calendar for April 30, 2010. It’s 7 weeks away and you can be sure that
as the date gets closer, buyer traffic is going to increase. You may
find sellers more willing to negotiate today than several weeks from
now.

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