At the risk of repeating myself, the clock is running on the housing tax credit. Last fall Congress extended the $8,000 first time home buyer tax credit and added an additional credit of $6,500 for current homeowners who want to move to a different home. Folks, this is the best housing deal that has come down the pike in a long time.
The tax credit applies to sales occurring between now and April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. If you are considering a move, please let us know as soon as possible so we can make these deadlines.
You claim the tax credit on your federal income tax return. A tax credit is different than a tax deduction in that a tax credit is a dollar-for-dollar reduction in the amount of taxes owed. Therefore, if you owe no income taxes or have already paid them, you can receive up to an $8,000 refund in the case of a first time home buyer or $6,500 in the case of a current home owner.
The refund may be claimed on the 2009 return or on an amended 2009 return if the return was filed prior to closing on the home. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to IRS Form 5405 as proof of the completed home purchase.
It is possible to use the credit as a down payment. As each person’s situation is unique, please call us to set up a consultation regarding down payment moneys.
If you are in the market for a home or need to sell yours, please feel free to consult with us. We’re full of housing information.