Tue 17 Nov 2009
Obscure Facts About HomeBuyer Tax Credits - IRS FAQs
Posted by karen under Uncategorized
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The IRS gets the final say when it comes to who gets to claim the homebuyer tax credit, who does not, and under what circumstances? They have made a feeble attempt to update some of the FAQs posted on their website http://www.irs.gov/newsroom/article/0,,id=206291,00.html but if it’s anything like the last extension, it will take them a while to update their FAQ page.
However, there are some little-known “interpretations” that most loan officers, real estate agents and even tax advisors dont know about.
1. When a FTHB buys a 2-4-family home, and occupies one of the units as their personal residence, they are only allowed to claim 10% (or $8000 max) of the unit they OCCUPY–not the entire sales price. Example: If the FTHB bought a duplex for $120,000 and the units are identical, the “cost basis” is $60,000 and the tax credit they can claim would be $6,000.
2. Income limits are based on ADJUSTED GROSS INCOME
3. Income CAN Exceed $125,000 (single) and $225,000 (married) by up to $20,000 and FHTB & Long-term Residences can still get a partial tax credit based upon a “MAGI formula” created by the IRS.
4. New Construction - the “date of purchase” is considered the “date” the FTHB OCCUPIES the property–not the closing date or the start-or-construction date.
5. Homes sold on “Land Contract or Contract for Deed” to a FTHB can QUALIFY for a tax credit if they meet 7 tests listed on the FAQs.
6. Tax credit is not available for FTHB in US Territories–only the 50 states.
A Mortgage Talking Points Flyer/Email notice can be found using this link. http://www.irs.gov/newsroom/article/0,,id=206291,00.html
