Many people have not looked at the generous details of the repeat home buyer tax credit! (Please remember that this information is general advice; consult your tax professional or the IRS for the most definitive interpretations of this benefit!)
Myth 1: A repeat buyer must buy a more expensive home or "move up" to claim the $6,500 credit...
TRUTH: The repeat buyer must have owned and lived in their home for at least 5 consecutive years of the last 8 years prior to the purchase date of the new property. Repeat buyers may purchase any home to be their new primary residence---more expensive, less expensive or the same price!
Myth 2: Two unmarried buyers cannot claim the tax credit if they purchase a home together, especially if they qualify for different credits...
TRUTH: The buyers can blend their credit, as long as the total credit for one purchased property does not exceed $8,000 (assuming one buyer is eligible for the first-time buyer credit) and as long as the manner of blending is reasonable--- so an even split of $4,000 each or a split of $6,500 to one and $1,500 to the other could be allowable.
Myth 3: You must occupy the home by April 30, 2010 in order to qualify for the credit...
TRUTH: As long as you enter into a binding sales agreement by April 30, you will still be eligible for the credit as long as you complete the purchase by June 30, 2010.
Myth 4: You cannot have access to the credit until after you close on the home...
TRUTH: As long as you are CERTAIN you will purchase a property, you can adjust your tax withholding in advance to compensate for your reduced tax burden during the year (assuming you will file this credit with your 2010 taxes--you also have the option to file this credit as if you purchased the property on December 31, 2009 if this works better for your tax situation).
For a more complete discussion of this program, visit www.federalhousingtaxcredit.com.
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