1st Time Home Buyer Credit

By
Real Estate Agent with Century 21 American Properties 9051300

The New Stimulus Bill enacted recently delivers first time buyers as follows...

"The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser's income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser". Note: There is a recapture if you sell your home within 3 years, at which the credit will be recaptured upon the sale. This only applies to folks who purchased in 2009, as the changes are effective January 1, 2009.

As a First Time Home Buyer, if you purchased a home on or after April 9, 2008, and before January 1, 2009, you may be eligible for a $7,500 tax credit as the result of the passage of The Housing and Economic Recovery Act of 2008 (President Bush). Please consult with your tax professional for any tax advice pertaining to either of these credits and whether you are eligible.

Am I Eligible?
First‐time homebuyers who purchase a principle residence on April 9, 2008 and before July 1, 2009 are eligible. If you (and your spouse, if married) have not owned your principle residence for a 3‐year period before your purchase, and you have never taken advantage of the DC first‐time homebuyer credit, you qualify as a first‐time homebuyer.
How does it work?

Like all tax credits, it will directly reduce the total amount of taxes you owe. When you file your taxes,for the year you purchased your home (2008 or 2009), you will be able to subtract the amount of the credit from your Federal income tax liability, increasing the size of your refund or reducing the amount you owe. For example, you file your ‘normal’ tax return and find that you owe $2,000 in taxes. With this credit, your tax liability could be lowered by $7,500—which means, you instead get a $5,500 tax
REFUND check from IRS.

You can see more about FAQs on the credit here



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Michael Mahoney

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