Monday, November 9, 2009

Tax Information on Extended First Time Homebuyer Credit

The new Worker, Homeownership and Business Assistance Act signed into law on Nov. 6, 2009 extends the first time homebuyer credit of $8,000 to sales made on homes purchased before April 30, 2010. The credit remains a fully refundable credit and does not have to be repaid. It is available to taxpayers whose income is up to $125,000 for single filers and $225,000 for joint filers. The credit can be claimed on an amended or current year return.
A new credit of up to $6,500 is also available for repeat homebuyers who have been in their principal residence during any five year consecutive period during the 8 year period that ends on the date the replacement home is purchased not to exceed April 30, 2010 or closing date of June 30, 2010. It is also fully refundable and does not have to be repaid. Taxpayers whose income does not exceed $125,000 for single filers and $225,000 for joint filers are eligible for the full credit with a complete phaseout at $145,000 for single filers and $245,000 for joint filers.
The credit is claimed on Form 5405, which is submitted with the original or amended tax return. For more information, visit www.sandrabaur.com or www.irs.gov.

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