IRS Clarifies What's Needed to Claim Tax Credit

Real Estate Agent with RE/MAX Executives Nampa, ID

IRS Clarifies What's Needed to Claim Tax Credit

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.

While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties' signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn't common.

The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. ... The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return."

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements. Source: Source: Washington Post (02/20/2010)




Comments (5)

Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Don:  What a concept.  It seems like the IRS is actually doing what makes sense... as far as not requiring all parties to have signed the HUD-1... in order to gain the tax credit.  Good news... thanks for sharing.

Feb 23, 2010 06:38 AM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Hey Karen, how are you!?  Thanks for stopping by! Yes, them doing something that makes sense, doesn't make sense...

Feb 23, 2010 10:50 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

There is still some confusion about the tax credit. Thanks for the post.

Feb 23, 2010 10:18 PM
Jill Schmidt
Aurora, CO

Don, Thanks for the post.  I'll have to checkout the IRS website to see if they are making clarifications there.  I like to have one place to refer people to all the details.....

Feb 24, 2010 03:52 AM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Gita, yes, when it comes to actual filing, it seems a bit confusing, but I think they are working through it!

Jill, That is very nice that you can refer clients to one place! Happy selling!

Feb 25, 2010 12:16 PM