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Connecticut Real Estate and Homes for Sale in Cheshire, Southington, Wallingford and All Central CT |
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Central Connecticut Real Estate Agent - Serving Cheshire CT, Southington, Wallingford, Hamden, Berlin, Newington, Wethersfield and All Central CT - Your Real Estate Consultant!
$8,000 Tax Credit for First Time Homebuyers First Time Homebuyer’s Credit Extended and Expanded to Include “Move-up” Buyers On Friday, November 6, President Obama signed legislation to extend the $8,000 home buyer tax credit for first-time buyers and add a $6,500 tax credit for repeat buyers who have lived in their home for five of the previous eight years. Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. Under the new bill, couples earning up to $225,000 a year and individuals earning up to $125,000 will be eligible for the credit. That’s up from the current $75,000 limit for individuals and $150,000 for couples. The legislation places an $800,000 cap on the home sale price. • Extends the $8,000 first time Homebuyers Tax Credit and creates a new $6,500 tax credit for homeowners buying a new home by July 1, 2010. • Homebuyers with contracts as of April 30 qualify for the credit so long as they close the transaction within 60 days. • The full credit is available to homebuyers with incomes of up to $125,000 for a single return or $225,000 for a joint return. • Not available for homes costing over $800,000. • Homebuyers who already own a home are only eligible if the home they are leaving has been used as a principal residence for five consecutive years in the last eight. • Provides authority to the IRS to provide greater oversight while processing the return and requires that the taxpayer claiming the credit be 18 or older. • Members of the military, military intelligence and foreign service who are on qualified extended official duty are not subject to the recapture fee and individuals who have been deployed overseas for 90 days or more in 2008 or 2009 can claim the credit through April 30, 2011. Much more information will become available through the Internal Revenue Service as time goes by, but for the time being below are links to information from other sources: National Association of Realtors’ “Changes to the Homebuyer Tax Credit Law” National Association of Realtors’ “Frequently Asked Questions About the New Bill” Overview of the Homebuyer Tax Credit as Prepared by the Staff of Senator Dodd November 6, 2009, Update from the IRS
Explanation of Credit for Homes Purchased Prior to November 6, 2009 Most importantly, the IRS defines a First Time Homebuyer as Taxpayers who have not owned another home at any time during the three years prior to the date of purchase. Who Can Claim the Credit? In general, you can claim the credit if you are a first-time homebuyer. You are considered a first-time homebuyer if:
Who Cannot Claim the Credit? You cannot claim the credit if any of the following apply.
Amount of the Credit Generally, the credit is the smaller of: $8,000 if you purchased your home in 2009, but only half of that amount if married filing separately, or 10% of the purchase price of the home. You are allowed the full amount of the credit if your modified adjusted gross income is $75,000 or less ($150,000 or less if married filing jointly). The phase-out of the credit begins when your MAGI exceeds $75,000 ($150,000 if married filing jointly). The credit is eliminated completely when your MAGI reaches $95,000 ($170,000 if married filing jointly). Repayment of Credit For Homes Purchased in 2009 You must repay the credit only if the home ceases to be your main home within the 36-month period beginning on the purchase date. This includes situations where you sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation. You repay the credit by including it as additional tax on the return for the year the home ceases to be your main home. If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit. If you and your spouse claim the credit on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit. Exceptions. The following are exceptions to the repayment rule.
For Much More Detailed Information, Check out the Following: Can I use the $8,000 as my Down Payment? Internal Revenue First-Time Homebuyer Credit Information Center
Expanded Tax Break Available for 2009 First-Time Homebuyers (IRS Newswire)
AnyHomes.com is providing the information on this web site for general guidance only. The information on this site does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information on this web site is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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