It's no secret that home prices are down significantly and mortgage interest rates are at very low -  combine this with the new tax credit for first time homebuyers and it's a winning combination! First-time homebuyers who purchase a home before December 1 of this year can claim a tax credit under the American Recovery and Reinvestment Act of 2009  or  "Stimulus Act" on their 2008 or 2009 tax return. For those who want to get the tax credit earlier, they can claim it on your 2008 tax return!  The form, number 5405, is available at www.irs.gov . 

The Treasury Department and the IRS will allow a tax credit of 10% of the purchase price up to a maximum credit of $8,000. If married filing separately then you are allowed $4,000 tax credit.  The tax credit of 2008 required that you repay the credit back- but the new 2009 stimulus tax credit must only be repaid if the homeowner sells in less than 36 months, or the home ceases to become the owner's principal residence during that time.  Taxpayers qualify with adjusted gross incomes up to $75,000 or $150,000 for married taxpayers filing jointly; the credit phases out above those income levels.

Gerard Ladalardo, CMPS
www.caloanpros.com