Homebuyer Tax Credit Extended, Expanded

First time home buyers chewing their nails wondering if their purchase will close by Nov. 30th to qualify for the $8,000 tax credit can relax. Yesterday, the deadline for the popular tax credit was extended until May 1, 2010 — and now you only have to be in a binding contract by the new deadline date, not fully closed. (Although the sale does have to close by the end of June.)

The extension includes two other changes that expand eligibility. First, the income limits have been increased — from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples filing jointly. Second, if you're not a first time home buyer, you may still qualify for a new, slightly lower $6,500 tax credit if you've lived in your current primary residence for 5 of the 8 previous years, and are purchasing a new primary residence.

For all the details on the new expanded home buyer tax credit program, check out the US News and World Report article.

Comments

[Fritz]

Ya Dave.

How many uf your clients haf you solt homes to dat vill be yoost as a PRIMARY home?

It does not apply.

However, dey might now be looking ut a condo or house near the city for der primary home und forego the home in the country wit the tomatos.

Fritz.

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Q: What types of homes will qualify for the tax credit?

A: Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

It is important to note that you cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members. Please consult with your tax advisor for more information. Also see IRS Form 5405.

http://www.federalhousingtaxcredit.com/faq1.php#2