Are You Eligible for the Home Buyer Tax Credit?

If you bought a Las Vegas home last year, you may be eligible for a tax credit of up to $8,000 when you file your 2010 tax return. If you are eligible, you’ll need to take extra steps to prove that your claim is legitimate. Here are the factors which determine your eligibility for the credit:

• The date when you signed the contract to buy your home. To claim the credit on your 2010 tax return, you must have signed a contract to purchase your primary residence before May 1, 2010.

• When you actually closed the sale. Home buyers who closed as late as September 30, 2010, qualify for the credit, as long as their original contract called for the purchase to be completed by June 30.

• Where you lived before you bought the home. For homes purchased between November 7, 2009, and April 30, 2010, there are two tax credits: a first-time home buyer credit and a repeat home buyer credit.

• The first-time home buyer credit is worth 10% of the purchase price of the home, up to a maximum of $8,000. The law defines a first-time home buyer as someone who hasn’t owned a principal residence in the three years before the purchase.

• The repeat home buyer credit is worth up to 10% of the purchase price, up to a maximum of $6,500. By law, a repeat buyer is someone who has owned and lived in the same home for at least five consecutive years of the preceding eight years. If you’re married, both spouses must meet the residency test.

• How much you paid for the home. The first-time and repeat home buyer credits are limited to homes purchased for less than $800,000.

• Your income. The full credit is available to taxpayers with a modified adjusted gross income of up to $125,000, or $225,000 for joint filers.

Be prepared to wait

The IRS is requiring taxpayers who claim the home buyer’s tax break to provide documents proving that they purchased a home within the required time frame. To meet that requirement, you must file your tax return by mail. The IRS imposed this requirement to deter fraud. Documents you may need to provide include:

• A copy of your settlement statement. Sign the statement, even if the document doesn’t have a line for your signature.

• For newly constructed homes, a dated copy of the certificate of occupancy that shows your name and the address of the home.

• For repeat buyers, copies of documents showing that you lived in your previous residence for five consecutive years during the past eight years. Acceptable documents include mortgage interest statements, property tax records, or homeowners insurance statements.

I am Yonas Woldu, and I can help you find the perfect investment property in Las Vegas or anywhere in Clark County. For the personalized attention you want with selling or buying property in Las Vegas, Green Valley, or other areas of Clark County, contact me today. And be sure to visit my Vegas Real Property website. I am committed to working with you – I am dedicated to helping you in every way possible.