Home > Blogs > Caryn Becker > Caryn's Blog

First-Time Homebuyers Tax Credit

By Caryn Becker

Real Estate Agent with The Cutting Edge, Realtors

January 07, 2009 01:51 PM

I have been diligent in educating the public about the First-Time Homebuyers Tax Credit. I don't know about you, but I like to buy things on sale. And right now, real estate is ON SALE! New home owners can find deals at incredible interest rates. But there is a bit of a problem? The IRS has not yet completed Form 5405 which needs to be filed along with their 2008 income taxes. This tax credit was signed into effect July 30, 2008. Be sure to spread the word because the media isn't.

Re-Blog

Comments(3)

Comment

Show All Comments Sort:

Paul & N'Marie Crumbie, TeamCrumbz

HomeSmart Premier - Team Crumbz - Fountain Hills, AZ

Everything We Touch Turns to Sold!

I've never heard of such a tax credit. Could you share a relevant website link?

Jan 07, 2009 02:23 PM

Pat Tasker

Shorewest Realtors - Germantown, WI

Your Milwaukee Metro Area Agent (WI)

I have a call in to my tax expert to ask....Haven't heard this before!

Jan 07, 2009 03:52 PM

Pat Tasker

Shorewest Realtors - Germantown, WI

Your Milwaukee Metro Area Agent (WI)

Here is the response from my tax expert Bonnie Koven at Fairshare Tax Service:

"Pat - It's possible that blog has old information. The Form 5405 is
complete, available, and NOT marked as draft."

so it looks like it IS available...

to House Everything Realty Group here is an explanation of it (also from my tax expert):

Here's the skinny:

Qualified homes of first-time homebuyers purchased after Apr 8, 2008 and
before July 1, 2009, are eligible for a refundable credit equal to THE
LESSER OF 10% of the purchase price of a principal residence, or $7,500.

TWO OR MORE UNMARRIED PERSONS PURCHASING A HOME TOGETHER WILL SHARE THE
CREDIT AS DESCRIBED BY THE IRS IN FUTURE RULINGS***

Income phaseout range for SINGLE filers is between $75,000 and $95,000.
Example: you're single with a 2008 AGI of $90,000. If you buy a
principal residence during the creditable period, the phaseout rule would
reduce your credit by 75% to only $1,875 ($7,500 - ($15,000/$20,000 x
$7,500) = $1,875).

Income phaseout range for joint filers is between $150,000 and $170,000.

Will have 15 years to pay back the credit, interest free. Repayments
start 2 years after the year in which the residence was purchased.
Payments must be in equal installments over those 15 years.