First Time Home Buyers $8000 Tax Credit Explained

Janice,

I would contact the FHA and give them the specifics involved and let them answer that question. It would help if the duplex already had a renter and the monthly rental income had already been established.

Good luck!

Sarah

Daniel,

You have to be married to file taxes jointly. If you are not married by Dec. 31, 2009 then you will have to file separately on your 2009 tax returns. Individuals, who are not married, that buy houses together may allocate the $8000 tax credit  between the two of them. You do NOT each get a $8000 tax credit.

The tax credit starts to be phased out if an individual has an adjusted income between $75,000 to $95,000 so you would probably benefit more by having your financee' take the entire tax credit.

I have tried to answer your questions to the best of my ability. I am not a professional tax advisor and I would recommend talking to a professional tax, accounting, or legal advisor before taking any actions based on my advise.

Michael,

You may only take advantage of only one tax credit.  The $7500 first time home buyers tax credit does have to be paid back $500.00 per year for 15 years starting in 2010 or paid in full the year you sell your home. Since the 2009 $8000 first time home buyers credit does not have to paid back,  it is the better choice. However, if you need the money this year, first time home buyers can claim the 2009 tax credit on their 2008 tax credit if:

They purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15.

They can extend their 2008 income-tax filing until as late as October 15, 2009.  (The IRS grants automatic extensions, but the taxpayer must file for the extension.  See www.irs.gov for instructions on how to obtain an extension.)

If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X.  (Form 1040X is available at www.irs.gov) 

Joe,

To be eligible for the $8000 first time home buyers credit, the property must be purchased between January 1, 2009 and November 30, 2009. The government considers the purchase date the day that the closing/settlement of the property occurs and title to the property transfers to the new owner. In my opinion, they are going to consider Dec. 19, 2008 as your purchase date since technically that is the day you became the new owner. The recording of deeds at county offices occurs after the closing and can take a while as in your case but buyers take possession of the property right after the closing and are considered the owner at that time. The good news is that you will qualify for the $7500 first time home buyers credit but unfortunately that  has to be paid back over a 15 year time period. You may want to check with a professional tax, accounting, or legal adviser to make sure my interpretation is correct.

David,

You are correct.  If you purchase a home between January 1, 2009 and April 15, 2009, you can claim the $8000 first time home buyers tax credit on your 2008 tax return.  The law allows a first time home buyer to choose to have their 2009 home purchase treated as if it was bought on December 31, 2008. Since unmarried home buyers can allocate the credit to the buyer who qualifies, then the tax credit could be given entirely to you. It appears in order for you to take advantage of the $8000 tax credit, you will need to go ahead and claim the purchase on your 2008 tax return. If you have already file your taxes then you will need to file an amended tax return by using Form 1040X. The form can be found on www.irs.gov. I think you will eligible if you do this; however, I would consult a professional tax, accounting, or legal advisor.

The law examines the history of both spouses and if either one has own a home in the last three years then the couple does not qualify for the first time home buyers tax credit. I am sorry to inform you that you would not.

Thank you for your question,

Sarah Adams

www.sarahsellsthemainline.com

Greg,

You will be able to claim the entire $8,000 credit. It is a $8,000 first time homebuyers tax credit for a purchase of a home so it doesn't matter if you are single or married. Buyers/Buyer receive a $8,000 tax credit because they have purchased a home between 01/10/09 and 12/01/09 but not any more than $8,000 for a purchase of a home.

Thank you for your question,

Sarah Adams

www.SarahSellsTheMainLine.com

Sami,

Yes, as long as you are living in one of the homes then you would qualify for the first time home buyers credit.

Thank you for your question,

Sarah Adams

www.SarahSellsTheMainLine.com

John,

Due to the nature of new construction, I would take the $8000 tax credit on your 2009 return. New construction is notorious for not being completed on time. The last clients of mine that bought new construction were not able to move into their home until a year later. I would want to be sure that you were going to be in your home before the  Dec. 1, 2009 deadline before claiming the tax credit. Buyers need to be very careful with new construction right now and do everything they can to protect their deposit money and interests. I am going to write a blog this week about what buyers should do and be aware of before having a home built. I wish you the best!

Thank you for your question,

Sarah Adams

www.SarahSellsTheMainLine.com

Dave,

Your son would qualify for the credit if he meets the income amount and has not owned a home in the past three years. Home buyers who are not married may allocate the credit as they deem reasonable. In your case, the entire amount should be allocated to your son since he qualifies as a first time home buyer and would be the only one who could benefit from the tax credit.

Thank you for your question,

Sarah Adams

www.SarahSellsTheMainLine.com

Marla,

Because this is your spouse's grandmother, I don't think you would qualify for the tax credit even if you are going to be the sole buyer. Any purchase of a primary residence or interest in a primary residence that is owned by a relative such as a mother, father, sibling, grandmother, grandfather, aunt or uncle does not qualify for the credit. I would think the irs would consider you related but you may want to ask a professional accountant or contact the irs to make sure.

Thank you for your question,

Sarah Adams,

www.SarahSellsTheMainLine.com

Joel and Lou,

I am sorry for taking so long to answer your questions concerning duplexes. It has taken a while to find out the standings on duplexes and how the credit would be handled. Buying a duplex as your first home would qualify you for the credit.  The price of the duplex would be split in half for the tax credit if you were buying a duplex and into fourths if you were buying a unit with three other units attached. So in order to get the full $8000 credit, you would need to purchase a duplex for $160,000 or more. If you bought a duplex for 100,000 then half of 100,000 would be 50,000 and 10% of 50,000 would be 5,000 so your tax credit amount would be $5000. The same math would apply to a quadplex. The price of a quadplex would have to be $320,000 or more to get a $8000 credit. The credit is 10% of the sales price up to $8000.

I hope this helps. Again, I apologize for the delay.

Thank you for your questions,

Sarah Adams

www.SarahSellsTheMainLine.com