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* As of the end of May, this feature is available only to military personnel returning from the Iraq and Afghan theaters. *
This feature is brought to you by TYLER TEXAS REAL ESTATE, for the benefit of my customers. The information on this page is from Kiplingers financial magazine.
November 13th, 2009
FEATURE
FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT.
The old credit was scheduled to expire Nov. 30. Under the new law, the credits are available to qualifying buyers who sign a binding contract by April 30, 2010, and who close by June 30, 2010.
You're considered a first-time buyer if you have not owned a home for at least three years before the date you settle on your new home.
A credit is available only for the home you are to live in. It's not available for rental properties or vacation homes.
For first-time buyers, the credit is 10% of the purchase price of the home, up to $8,000. Therefore, if your house costs $80,000 or more, you can qualify for the maximum tax credit.
The credit does not have to be repaid, as long as you live in your house for at least three years. If you sell or move out before three years, you have to repay the money as extra tax on your tax return for the year you sell or move. (The payback can't exceed the amount of profit you make on the sale, though.)
LONGTIME HOMEOWNERS FEDERAL INCOME TAX CREDIT
This credit is available to qualifying buyers who sign a binding contract by April 30, 2010, and who close on a new home between Nov. 7, 2009, and June 30, 2010. To qualify, you must have continuously owned and lived in a home for at least five of the eight years leading up to the purchase of a new home.
If you have owned and lived in your current home for at least five years, for example, you can qualify. If you bought the home you're living in now less than five years ago, however, you won't qualify.
The credit is 10% of the purchase price, up to $6,500. As with the first-time-buyer credit, this one is available only for the purchase of a principal residence, not a vacation home or rental property. And if you sell the place or move out within three years, you have to pay back the credit on your tax return for the year you sell or move. Homes that cost more than $800,000 are ineligible for the credit.
Income-eligibility rules are the same as for the first-time-buyer credit. The right to claim the credit disappears as adjusted gross income rises between $125,000 and $145,000 on a single return and between $225,000 and $245,000 for married couples filing joint returns.
To get your tax credit you'll need to file a Form 5405 to claim the credit and include a copy of your settlement statement (such as the HUD 1 form) to prove that you bought the house. The settlement statement was not required for deals that closed before Nov. 7.
IF YOU'VE HAD THIS KIND OF SERVICE BEFORE, WELCOME BACK!
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