Detailed
Information on
Tax Credit
Here are details
on the extension
and expansion of
the U.S. tax
credit for
homebuyers
signed into law
on November 6,
2009 by
President Obama:
Deadline
Extended Into
2010
The tax credit
was originally
to end November
30, 2009. It has
now been
extended into
2010. If you
have a signed
purchase
agreement by
April 30, and
close the
transaction
before July 1,
you’re eligible
for the credit.
Most Other
Buyers Now
Eligible
First-time
homebuyers are
eligible for a
credit of 10
percent of the
price of the
home, up to
$8,000. (Married
couples filing
individually can
receive $4,000
each.) You are
considered a
first-time buyer
if you haven’t
owned a
principal home
in the U.S. in
the last three
years.
The tax credit
has also been
expanded to
buyers who have
owned a home at
some period
during the last
three years and
used it as their
principal
residence for
five consecutive
years in the
last eight. They
can receive up
to $6,500 - or
$3,250 for
couples filing
as individuals.
No Repayment if
You Stay in Home
for Three Years
The buyer does
not need to
repay the tax
credit, if
he/she occupies
the home for
three years or
more. However,
if the property
is sold during
this three-year
period, the full
amount of the
credit will be
recouped on the
sale.
Caps on Income,
Home Price
Individuals who
earn up to
$125,000, and
couples who earn
up to $225,000,
are eligible for
the full credit.
Individuals who
earn between
$125,000 and
$145,000 – and
couples who earn
between $225,000
and $245,000 -
can receive a
percentage of
the full credit.
The maximum
purchase price
is $800,000. Any
home selling for
more than that
makes the buyer
ineligible for
the credit.
Taking Advantage
of the Credit
You can claim
the credit on
your 2009 or
2010 tax return.
There are also
programs in
place to enable
you to use the
funds to help
with the down
payment.
Applying the
Credit to Your
2009 Taxes
You will need to
do three things
to claim the
credit on your
2009 tax return:
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• |
Fill out the applicable IRS form to determine the amount of your available credit. |
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• |
Apply the credit when you file your 2009 tax return or an amended return. |
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• |
Attach documentation of purchase to your return or amended return. |
If You Purchase
in 2010
Buyers
purchasing in
2010 will have
the option to:
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• |
Claim
the
credit
on
their
2009
return,
even
if
the
purchase
is
completed
after
December
31,
2009.
|
|
• |
File
an
amended
return
for
2009
if
their
purchase
is
completed
after
April
15,
2010.
|
|
• |
Claim
the
credit
on
their
2010
tax
return.
|
Contribution to
the Economy
National
Association of
REALTORS®
economists
estimate that
the tax credit
has contributed
more than $22
billion to the
economy, and
that 2 million
people will take
advantage of it
this year.
Find a RE/MAX
agent
to assist you in
your home
purchase.
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