Archive for April, 2009

$8,000 First-time Home Buyer Tax Credit - More Questions

Friday, April 17th, 2009

FSBO.com has been getting a lot of calls this week on the $8,000 First-time Home Buyer tax credit being offered by the federal government through The American Recovery and Reinvestment Act of 2009.  Glad potential home buyers are taking notice to this awesome incentive!  Here are the most frequent questions being asked…

If I already filed my taxes for 2008, yet bought my home in 2009 when should I claim my credit?  You have two options if you have already filed your 2008 taxes.  From the IRS website…

  • Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.
  • Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

    • Do I qualify for the tax credit if I buy the home from a relative?  From IRS Form 5405…”You cannot claim the credit if the following apply - You acquired your home by gift or inheritance or You acquired your home from a related person.  A related person includes: Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc); A corporation in which you directly or indirectly own more than 50% in value of the ourstanding stock of the corporation; A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.”

    I am buying the property with a person who is not a first-time home buyer nor is my spouse, but I am a first-time home buyer.  Am I still eligible for the tax credit?  Yes, you may depending on your specific situation. This notice from the IRS gives several good examples and further explanation.

    Please visit the FSBO.com Tax Credit page for more information and links to other resources.  We recommend you consult a tax professional for more specific information that may pertain to you, as several states also have local policies. 

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