The $8,000 homebuyer’s credit is still available, but time is running out. To qualify as a first-time homebuyer, you must not have owned a home in the last three years. The tax credit is 10 percent of the purchase price of a home up to a maximum of $8,000. This applies to a single taxpayer or a married couple filing a joint return. Married couples filing separate returns qualify for half that amount. The $8,000 credit applies to sales in 2009 and through the end of April, 2010.
If you’re not a first-time homebuyer, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you buy your new home. The maximum credit is $6,500 for a single taxpayer or a married couple filing a joint return, or $3,250 for a married couple filing separate returns.
You must enter into a binding contract (reach mutual acceptance) to buy a home before May 1, 2010, and close before July 1, 2010. If you’re building a home, the purchase date is considered to be the date you first occupy the home.
The credit is claimed on IRS Form 5405, First-Time Homebuyer Credit, which was revised in December. It must be filed with your 2009 or 2010 federal income tax return, depending on which year you’re claiming the credit. If you have already filed a 2009 tax return without claiming the credit, but bought a home that qualifies, you can amend your return to claim the credit using Form 1040X with the December 2009 Form 5405 attached.
Long-time residents do need to prove they have lived in their home for five consecutive years by providing mortgage interest statements, property tax records or homeowner’s insurance records for five consecutive years. There are also income limitations to qualify for the credit. Single taxpayers cannot make more than $125,000, and married couples filing jointly cannot make more than $225,000.
For additional details, go to: $8,000 First-Time Home Buyer’s Credit.
Last Updated on September 2, 2019 by Chuck Marunde