$6,500 is yours even if you don't sell your current personal residence!

I just spent an hour on hold with the Internal Revenue Service to gain clarity on something and here is what I found out:

Q:  I'm already a homeowner. If I buy another home after Nov. 6, 2009, to use as my principal residence, do I have to sell my home to qualify for the homebuyer tax credit?

A: No. If you meet all of the requirements for the credit, the law does not require you to sell or otherwise dispose of your current principal residence to qualify for a credit of up to $6,500 when you buy a replacement home to use as your principal residence. The requirements are that you must buy, or enter into a binding contract to buy, the replacement principal residence after Nov. 6, 2009, and on or before April 30, 2010, and close on the home by June 30, 2010. Additionally, you must have lived in the same principal residence for any five-consecutive-year period during the eight-year period that ended on the date the replacement home is purchased. For example, if you bought a home on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, through Nov. 30, 2009. (11/17/09)

Learn more about the $6,500 tax-credit straight from the IRS website: CLICK HERE

This is a great opportunity for those homeowners that otherwise qualify for this credit but want to keep their currnet personal residence as a rental property or a vacation home. The key is in bold above: You just need to buy a replacement personal residnece!

The IRS is updating information about this tax-credit often. It appears from the footnote on the link provided above that the IRS webpage was updated today. With that said, we urge you to consult with your lender and/or tax professional and/or the IRS directly if you have a spcific circumstance or question about the $6,500 tax-credit.

Robert Wiebusch ~ NP Dodge Blog Author