First Time Homebuyer Tax Credit Update – AKA IRS Implies “When Hell Freezes Over”

By
Mortgage and Lending with Veritas Funding, SLC, UT NMLS #231319

*** Today's news from the IRS - the release date of the updated IRS Form 5405 changes from January 8th, 2010 to "soon". ***  See here..  http://www.irs.gov/pub/irs-pdf/f5405.pdf?portlet=3   Anyone care to elaborate on what that means?

(Below please read blog dated 1/04/10 which shows the original IRS bulletin stating the new 5405 would be available on January 8th, 2010).

First Time Homebuyer Tax Credit Update - Will the right/ WRONG Form 5405 work?

Yikes!  The IRS is at it again.  I've been having my first time home buyers visit my CPA referral partner to re-file amended 2008 tax returns to claim the $8000 tax credit - averaging about six to eight weeks to get their money.  Throughout 2009 everything was working like a honey until..... November 7, 2009 - the extension date of the FTHB tax credit.  The IRS is updating Form 5405 (the form needed to claim the credit) but hasn't made it available (yet). 

WHAT THIS MEANS TO YOU!

Clients who purchased a home AFTER November 6th, must wait until the REVISED Form 5405 is available BEFORE claiming the $8000 (or $6500 move up) tax credit.  This can be "sticky" if the FTHB is receiving gift funds with the intention of paying them back with the tax credit proceeds (as is the case with one of my clients).  Please read this below and educate yourself - see my website at www.utahloanplan.com for more info or call me directly at 801.983.8211 to discuss. 

Information regarding the 2008 Form 5405,

First-Time Homebuyer Credit

 

Changes have been made to the first-time homebuyer credit by Public Law 111-92, the Worker, Homeownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009. As a result, this 2008 Form 5405 can be used only for homes purchased before November 7, 2009, for which you choose to claim the credit for 2008. We will issue a December 2009 revision of Form 5405 to reflect the new law. The December 2009 revision must be used for all homes purchased after November 6, 2009 (whether the credit is claimed for 2008 or for 2009) and for all claims on 2009 returns for homes purchased any time in 2009 or in 2010.  We expect to post the new revision of Form 5405, and its new separate instructions, on IRS.gov by January 8, 2010.

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Comments (2)

Randy DeLaMare
Realtypath LLC - Salt Lake City, UT
Helping friends Realize their Real Estate Dreams

Joe, It is the government, need I say more? Not only the government but the IRS. This has got to be thrilling those who are needing to file for their credit. Thanks for the post

Jan 12, 2010 08:01 AM
Anonymous
LCVCPA

Isn't it amazing how Congress can bail out Wall Street with funds in just "days" and then promise funds for home purchases to keep the housing market afloat BUT then effectively cut those people off at the knees but playing around with a form?   Basically, those who closed on November 7th have been waiting 60 days to just get in the game.

The IRS has been paying interest on the previous refunds because of delays so maybe we should be positive in that this $8K might be earning interest at the best possible rates and an excellent investment.

Just my 2cents from Oklahoma.

Jan 12, 2010 08:39 AM
#2