Basic Information On The Federal Homebuyer Tax Credit

Basic Information On The Federal Homebuyer Tax Credit


By: Paul
Escobedo



With April coming to an end soon, so follows the expected expiration of
the Homebuyer Tax Credit offered by the federal government for first-time
homebuyers and existing homeowners. The last iteration of the tax credit
was set to expire on November 30, 2009. On November 6, 2009 the tax
credit was extended and expanded through spring of 2010. Presently, the
tax credit is available for first-time homebuyers and existing homeowners
who sign the purchase contract on a primary residence by April 30, 2010
with the closing completed by June 30, 2010.

For in depth information on the federal tax credit for homeowners view
the site at IRS.gov. As far as basic information goes, the federal
government is offering a tax credit for first-time homebuyers and
existing homeowners who enter into a binding contract to purchase a new
home by April 30, 2010 with the closing completed by June 30, 2010.

A first-time homebuyer is defined as a buyer who has not owned a home
during the last three years up to the date of the purchase of the
residence. First-time homebuyers are able to claim a tax credit for 10%
of the purchase price of a home up to a maximum of $8,000. The home
purchased cannot exceed the $800,000 price cap. The full credit will be
available if taxpayer has a modified adjusted gross income up to $125,000
if filing as single and up to $225,000 if filing jointly. A partial
credit will still be available if a single filers MAGI exceeds the
$125,000 as long as it stays between $125,000.01 and $145,000. Joint
filers can receive a partial credit if their MAGI are between $225,000.01
and $245,000.

An existing homeowner is defined as someone who has lived in a home for a
period of 5 consecutive years out of an S year period ending on the
purchase date of the home. Existing homeowners purchasing a new primary
residence may claim 10% of the purchase price of the residence up to a
maximum of $6,500. The home purchased must not exceed the $800,000 price
cap. As with the first-time buyer credit, the full credit will be
available for existing homeowners if the taxpayer has a modified adjusted
gross income up to $125,000 if filing as single and up to $225,000 if
filing jointly. A partial credit will still be available if a single
filers MAGI exceeds the $125,000 as long as it stays between $125,000.01
and $145,000. Joint filers can receive a partial credit if their MAGI are
between $225,000.01 and $245,000.


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Paul Escobedo

Chicago home builders.