Understanding the $ 8000 vs $ 6500 Tax Credits

As 2010 quickly approaches, there are still many questions concerning the tax credit extension. Who is eligible for the $ 8,000 and who is eligible for the $  6,500 ?

Some of the quick facts are:

Homes must be under $ 800,000 in price.

First time home buyer is a buyer who has not owned a home during the 3 year period prior to the purchase of the new home. A vacation home or rental home that has not been used as a primary residence does not disqualify the buyer.

If married, you must pass the consecutive year test. If you have owned a property but your spouse has not, you would then qualify for the $ 6500 tax credit.

Unmarried joint buyers may allocate the credit amount to any buyer such as a son or daughter by buying jointly with this person.

Income limits have increased with this new tax credit extension. Income limitations are now $ 125,000 for single tax payers and are $ 225,000 for married couples who file jointly.

Important key dates are:

April 30, 2010 - must be under contract with all paperwork signed and dated
June 30,2010  - must be able to close on or before this date.

Tax credit form for the IRS can be viewed here.