Charlotte NC Home Buyers--IRS Issues Documentation Rules for Home Buyer Tax Credit

Charlotte NC Home Buyers—IRS Issues Documentation Rules for Home Buyer Tax Credit

Are you thinking of taking advantage of the Home Buyer Tax Credit in 2010?  If so, you need to know the eligibility requirements and deadlines for the program.  In addition, the IRS has issued new rules requiring certain documentation to be submitted with your request for the tax credit. 

What do Charlotte NC home buyers need to know about the home buyer tax credit and the new documentation requirements?

Who qualifies?

• A first time home buyer is someone who has not owned a principal residence during the three years prior to the date of purchase.
• A repeat buyer is someone who purchases a home to use as a principal residence after living in their current residence for at least five consecutive years in the past eight years.

What is the amount of the tax credit?

• First time home buyers may get ten percent of the cost of the home up to $8000.
• Repeat home buyers may get ten percent of the cost of the home up to $6500.

What are the deadlines?

• The home must be under contract by April 30, 2010 and close no later than June 30, 2010.

What documentation must be submitted when claiming the Home Buyer Tax Credit?

• IRS Form 5405 must be submitted along with certain documentation.
• First time home buyers must submit a copy of their settlement statement, or HUD1 form, with Form 5405.
• Repeat home buyers must include documentation to show their five-year residency in the previous home, such as mortgage interest statements, property tax records, or homeowners insurance records.
• Tax filers wishing to claim the Home Buyer Tax Credit must file with paper forms rather than electronically because of these documentation requirements.

What should be the first step in the process for Charlotte NC home buyers who want to participate in these programs?

• First time home buyers should contact a real estate broker and a mortgage loan officer for home purchase prequalification.  Learn more about buying your first home here.
• Repeat home buyers will want to contact a real estate broker to determine the value of the current residence.  Click here to request a comparative market analysis of your home.

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Charlotte NC Home Buyers—IRS Issues Documentation Rules for Home Buyer Tax Credit*