How Does the Buyer Use and Take Advantage of the First Time Homebuyer U.S. Income Tax Credit?

 See and download form 5405 from IRS website  ~ 

Form 5405 "First Time Homebuyer Credit" (click here).

• The credit is for up to $8,000 or 10% of the purchase price of the new home with an $8,000 maximum.

For a 2009 purchase the buyer has the option of claiming the credit on their 2008 return or their 2009 return.  This is a fully refundable credit, so there isn't a reason to wait.

This IRS form 5405 (click here) is to be filed with form 1040X Amended 2008 US Individual Tax Return.

When you finish with filling out the forms, you will see that the credit ends up on line 15 of form 1040X, which reads "refundable credit only" and references form 5405.

• Even if you didn't pay $8,000 for income tax for that year, you get that $8,000 back as a refund if all other requirements are met.

And if you as buyer live in this home for 36 months after purchase, you  will never have to repay it.  

• This credit is good for all purchases between April 9, 2009 and December 1, 2009.

For questions and answers on whether you will qualify for this tax credit, see IRS site (click here).

For other information, see the Internal Revenue Service web site (click here).  

You must determine for yourself whether you will qualify for this tax credit. 

• So contact the IRS directly or your CPA or local income tax professional.

Don't miss this approaching deadline that you must buy this home and close escrow by November 30, 2009. 

• Now is the time to take advantage of your $8,000 First Time Homebuyer Income Tax Credit.

If you want to purchase a home in Orange County, CA, and want to use this Homebuyer Tax Credit, please contact us.  Thank you.  

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.