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Home Buyer Tax Credit 2009/2010

published on November 13, 2009

Real Estate Tax Credit Extended and Expanded: The real estate tax credit has been extended and expanded!  The details of the tax credit, which is compliments of the National Association of REALTORS®, is outlined below and can be found at realtor.org.  More information can be found at the IRS website by clicking this link.
I.            The Basics: Extended Home Buyer Tax Credit 2009/2010
a.       Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
b.      Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
II.            Who Qualifies?
a.       First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
b.      Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
c.       To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
III.            How is a Buyer’s Credit Amount Determined?
a.       The price of the home.  Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
b.      The buyer’s income.i.     
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
ii.      These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.   
c.       If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?i.      Yes, some buyers may still be eligible for the credit.
ii.      The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly.                                            iii.      The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
IV.            Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
a.       Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
V.            Will the Tax Credit Need to Be Repaid?
a.       No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
VI.            If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.
Source: The information contained herein is subject to errors, omissions and changes without notice.  Any information, statistics, analytics, recommendations or opinions provided in this report are subject to errors and/or omissions and are not in any way guaranteed as accurate or reliable by Brian Talley or by Regent Property Group LLC.

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