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

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. 

    This entry was posted on Friday, April 17th, 2009 at 10:49 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    13 Responses to “$8,000 First-time Home Buyer Tax Credit - More Questions”

    1. Sell My Own Home Says:
      April 20th, 2009 at 11:07 am

      Wow, really nice write up. I work in the real estate trenches every day and these questions are ALWAYS coming up!

      Thanks for posting such a nice, helpful piece!

    2. Sell by Owner Says:
      April 20th, 2009 at 3:44 pm

      You are certainly right - this is an awesome incentive for first time home buyers! I hope people take advantage of this great tax credit!

    3. Sean Patrick Says:
      April 29th, 2009 at 12:36 pm

      Very interesting. I learned a lot. Thank you : )

    4. David Says:
      May 4th, 2009 at 3:14 am

      I was hoping that the senate might do more but something is better than nothing.
      I have never bought a home but unfortunately my wife has so it doesn’t look like we will even qualify.
      Thanks for your explanation.

    5. Shanon Says:
      May 21st, 2009 at 10:53 pm

      We are trying to figure out if it is an actual 8k we would get back or 8k credit that ends up being considerably less? (especially if it bumps us into a higher tax bracket or something) Also, I just have to close on the house before the end of the year 12-31-09, right?

      Thanks, Shanon

    6. Mike, FSBO.com Says:
      May 22nd, 2009 at 8:34 pm

      My cousin just closed on his first house May 4, 2009. The next day went back to his accountant, who filed an Amended 2008 Federal Tax return and his $8000 check is in the mail right now

    7. Donna Sweeney Says:
      June 4th, 2009 at 7:53 pm

      Not a happy camper that Congress feels a Mobile home in a mobile home park is considered a home and then disqualifies us for the first time home buyer credit. I do not get any interest on my loan as it is a Rec Vehicle loan and the taxes to the city are considered permit fee. This Condo we are purchasing is our first home. Even the people buying our mobile home when we sell it get 10% of the sale price. Not fair at all.

      Most people buy a mobile home because they do not have enough downpayment for a home and are trying to rebuild their credit.

      Thanks Congress for thinking of the Middle Class.

    8. Nikaniki Says:
      June 22nd, 2009 at 9:55 am

      I usually don

    9. Lewis CPA Says:
      July 23rd, 2009 at 3:15 am

      The Federal Housing First Time Home Buyer Tax “Credit” is really a no interest loan that must be paid back over 15 years. You receive the credit by claiming it on your Federal income tax return (the line it is on depends on what IRS tax form you use to file your taxes). Married couples making less than 150K and single people who make less than 75K can receive the full $7500 credit, but you must purchase the home between 4/9/08 and 6/30/09 to qualify.

    10. connie Says:
      August 27th, 2009 at 10:22 am

      Does anyone know the answer…my husband and I are trying to help out 20 year old daughter buy a house. She is a full time student and works part time - she pays all her own bills and is currently renting a house. In order for her to qualify for a mortgage loan, we would have to co-sign the loan with her. Would she qualify for the 8000 rebate?

    11. Molly Says:
      September 18th, 2009 at 5:45 pm

      What happens if I always get a tax refund at the end of the year and I buy a house for the first time, does it mean I will get my usual refund plus 8000 or what? I am very curios.

    12. Estate Taxes Says:
      November 19th, 2009 at 12:49 am

      It’s good that there’s like an extension for more questions regarding the $8,000 First-time Home Buyer Tax Credit because you answered my question if I’m going to buy a home from those who are not first timers. Thanks! It’s really a great help especially the link for the expanded explanation.

    13. Gift Taxes Says:
      November 20th, 2009 at 1:59 am

      This would be very beneficial to first time home buyers. I learned so much from this post. Thank you so much!

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