IRS First Time Home Buyer Credit FAQ's, Is It a Gimmick?

Curious as to how the IRS "first time home buyer credit" works, whether you qualify and how to take advantage of it? There's a good FAQ section over at FederalHousingTaxCredit.com that goes over the "first time home buyer credit" in detail.

Here's an excerpt:

1. Who is eligible to claim the $7,500 tax credit?

First time home buyers purchasing any kind of home-new or resale-are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.

2. What is the definition of a first-time home buyer?

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How do I claim the tax credit? Do I need to complete a form or application?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.

4. What types of homes will qualify for the tax credit?

Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.

For the full set of questions and answers regarding the IRS "first time home buyer credit", check out the FAQ section over at FederalHousingTaxCredit.com.

***NOTE: Before you get too excited about the tax credit, make sure you go through all the FAQ's and then go over to CNNMoney.com to read this post about how it may not be all that it's cracked up to be.