Home Buyer Tax Credit 2010: What First-Time Home Buyers Need To Know?

The home buyer tax credit deadline is almost up. If you’re a home buyer interested in taking advantage of the tax credit you may find some useful answers to your questions here.

If I’m qualified for the tax credit and buy a home in 2009 (or 2010), can I apply the tax credit against my 2008 (or 2009) tax return?
Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 (or 2010) as if the purchase occurred on December 31, 2008 (or if in 2010, December 31, 2009). This means that the previous year’s income limit (MAGI) applies and the election accelerates when the credit can be claimed. A benefit of this election is that a home buyer in 2009 or 2010 will know their prior year MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their prior year tax return, but who have already submitted their tax return to the IRS, may file an amended return claiming the tax credit using Form 1040X. You should consult with a tax professional to determine how to arrange this.

For a home purchase in 2009 or 2010, can I choose whether to treat the purchase as occurring in the prior or present year, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount

How can two unmarried buyers allocate the tax credit if one qualifies for the $8,000 first-time home buyer tax credit and the other qualifies for the $6,500 repeat home buyer credit?
The buyers can allocate the tax credit in any reasonable manner, provided neither claims a tax credit higher than the one they qualify for and the home purchase does not yield a total of more than $8,000 in tax credits. For example, the repeat home-buyer could claim $6,500 and the first-time home buyer could claim $1,500. Alternatively, both buyers could claim a $4,000 tax credit.

If a single person (Taxpayer A) qualifies as a first-time home buyer at the time he/she purchases a home with someone (Taxpayer B) that is not a first-time home buyer and then later that year they marry each other, is the credit still allowed?
A. Eligibility for the first-time home buyer tax credit is determined on the date of purchase. If Taxpayer A, a first-time home buyer, buys a house and then later that year marries Taxpayer B, not a first-time home buyer, the credit is allowable to Taxpayer A. Taxpayer A may take the maximum credit.

Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?
A. Yes. Taxpayer B is not a first-time home buyer and cannot claim any portion of the credit, but A may claim the entire credit, if the home was purchased as Taxpayer A’s primary residence

It is not often in life we find ourselves afforded with a second-chance opportunity, considering the massive costs involved with this legislation, this is the last chance to take advantage of this tax credit if you qualify. The Senate, The House of Representatives nor the President of The United States of America may not allow any further extensions to this program once it expires in after April 30, 2010.

If you qualify and would like to take advantage of this once in a life time opportunity, check our low current mortgage rates and call us today at 877-868-2503.