On November 6, 2009, President Obama signed into law the “Worker, Homeownership, and Business Assistance Act of 2009.” The new law extends and generally liberalizes the tax credit for first-time homebuyers and includes some restrictions to prevent abuse of the credit. What can this mean for you? The new law will make it easier for you to buy or sell a home and aims to improve the real estate markets. Best of all, the changes can be a tax-saving tool!
Here are the facts about the revised homebuyer credit:
· Deadline Extended. Previously, the homebuyer credit applied only to purchases after April 8, 2008 and before December 1, 2009. Now the homebuyer credit is extended to apply to a principal resident bought before May, 1, 2010. Additionally, homebuyers can use the credit if they bought a principal residence before July 1, 2010 if they entered a written contract before May 1, 2010. With the extra months available, homebuyers can apply the credit if they find a home they like but cannot close on it before May 1, 2010.
· “Long-Time Resident” Credit. The homebuyer credit no longer applies to first time home purchases. If you maintained the same principal residence for any period of five consecutive years during the eight years ending on the date that you buy the subsequent principal residence, you can claim credit of up to $6,500. In order to qualify, you do not need to sell your current home; rather you can buy the replacement home to meet the new deadlines.
· Now available to higher-income taxpayers. The homebuyer credit phases out over higher levels of modified AGI, range is between $125,000 and $145,000.· New home-price limit for the homebuyer credit. The homebuyer credit cannot be claimed for a home if its purchase price exceeds $800,000.
The restrictions:
· Settlement Statement. The homebuyer credit cannot be claimed unless the taxpayer attaches the settlement statement to the return.
Please call us today to find out how you can benefit from the homebuyer credit!
Can I buy a home in my 17 y/o sons name and take advantage of the credit?
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