KatyHomeFinder - Caution for Folks Who Utilized Home Buyer Federal Tax Credit

Real Estate Agent with Berkshire Hathaway HomeServices Anderson Properties TX Real Est. 567774

It is my understanding that the Internal Revenue Service is seriously increasing its efforts to fight fraud in the home buyer tax credit area. The IRS is in the process of adding staff from other sectors so that they can audit over 200,000 tax returns where the home buyer tax credit was taken. All first time home buyers and folks who already owned a home have to include with their tax return a copy of the HUD1 or Settlement Statement. If you plan to file for your tax credit while filing your 2010 FIT return remember to include a copy of this document along with Form 5405. A copy of the settlement statement should be in the packet or binder the Title Company gave you at closing. Those folks who already owned a home and purchased a new residence need to include copies of proof of owning the same home for five consecutive years out of the last eight years. The credit amount maximium for these folks is $6,500.  Proof of ownership can be establish with including copies of local real estate tax bills, insurance bills, utility bills, etc. as supporting documentation and filed with your return.

The best tax advice I give anyone is to hire a CPA who has a tax practice that mainly represents individual taxpayers. Similar to hiring a Real Estate agent I suggest you interview a potential tax preparer.

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© 2015 Bob Gilbert Real Estate


Note: Katy TX is about 25 -30 miles due West of downtown Houston TX.


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Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Bob, We have been hearing about this Tax Credit Fraud.  I understand that some prisoners in jail filed for and received first time homebuyer tax credits. Unbelievable!  Where there is something to be gained it seems that fraud always seem to come into the picture. It's a real shame.

Dec 07, 2010 07:37 PM #1
David Krichmar
www.DaveYourMortgageGuy.com, FHA, VA, USDA, HomePath, Jumbo - Sugar Land, TX

Thanks Bob for the information.  The government really has cracked down on this since the tax credit was first rolled out. 

Dec 08, 2010 10:14 AM #2
Yolanda Cordova-Gilbert
David Weekley Homes - Katy, TX
David Weekley Homes in Cinco Ranch

Wow! i cannot believe that prisoners received Tax Refunds. I worked for another builder at the time and our corporate staff was there making sure all contracts were turned in, executed and logged into our system before midnight on April 30,2010. On May 1,2010 I received calls from realtors asking if we would back date contracts and I said emphatically NO! They then proceeded to tell me there were builders doing that! I told them we were not one of them. Amazing!

Dec 08, 2010 10:28 AM #3
Robert (Bob) Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX Real Estate Expert

I believe the IRS will find a lot fraud and probably will not get the heavy hitters but will pick on small folks who just did not understand what they really needed to do and they did not hire a competent tax preparor...

Dec 08, 2010 06:07 PM #4
Renée Burrows
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

I am wondering what will happen if they sell too early or if they house gets foreclosed on!  I am sure there will be fraudulent issues all over the board with the tax credit!

Las Vegas Real Estate

Dec 12, 2010 01:22 PM #5
Robert (Bob) Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX Real Estate Expert

If they sell too early the IRS will recoup the tax credit. Off the top of my head I believe a person/family who claimed the tax credit have to live in their home for 3 years or face the IRS taking it away. I am unsure about foreclosure but I will see if I can find someting on the IRS web site...

Dec 12, 2010 07:03 PM #6
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy and afternoon Bob

Bob my friend, this sure was more outstanding info you got out to help folks be in the know!

Have a good one
Dale in New Hampshire

Sep 07, 2013 12:15 PM #7
Baker Home Inspection and Commercial Properties Inspections
Baker Residential and Commercial Properties Inspections - Springfield, VT
Home and Commercial Properties Inspections Vermont

Will howdy to ya Bob my friend, you sure post such outstanding local blog posts for folks to enjoy visiting your outstanding blog full of helpful info. Folks sure do always get to find mighty enjoyable reading when they visit.

Jan 24, 2014 08:30 AM #8
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