Armi & Ronald Abiera

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Home Buyer Tax Credit Extended and Expanded
 
Originally set to expire on November 30, 2009, the homebuyer tax credit has been extended and expanded and allows both eligible first time homebuyers and long time homeowners to receive credit for purchasing a home to be used as their principal residence. Here are the details:
 
When is the new deadline?
  • April 30, 2010
  • If a written binding contract to purchase is in effect on April 30, 2010, the qualified buyer will have until June 30, 2010 to close
What is the maximum allowable credit available to a qualified buyer?
  • Up to $8000 for a first time home buyer ($4000 if married, filing separately).
  • Up to $6500 for a current homeowner ($3250 if married, filing separately).
Who qualifies for extended credit?
  • First time homebuyers who purchase homes between November 7, 2009, and April 30, 2010, to use as a principal residence; homebuyer and spouse cannot have owned a principal residence for three years prior to home purchase.
  • Current homeowners who purchase homes between November 7, 2009 and April 30, 2010, to use as a principal residence and have used the previous home as a principal residence for five consecutive years of the past eight years.
  • The purchaser must be at least 18 years old on the date of purchase; for a married couple, only one spouse must meet this age requirement.
  • In addition to previously-required documentation, homebuyers also must include documentation of purchase with tax returns to secure the credit.
  • The buyer cannot receive the tax credit if purchasing a home from a relative.
What are the income limits for the newly-extended credit?
  • $125,000 for single buyers and $225,000 for married couples (additional $20,000 phaseout allows for partial credit).
  • Homebuyers who earn more than $145,000 for singles or $245,000 for married couples filing jointly are not eligible for the credit.
  • Higher income limits apply only to qualified buyers who purchase their homes between November 7, 2009 and April 30, 2010.
What is the maximum home purchase price?
  • The maximum home purchase price is $800,000
Will the extended credit need to be repaid?
  • The credit does not have to be repaid as long as the buyer occupies the purchased home as his or her principal residence for more than three years.

For additional details and filing instructions, please visit www.IRS.gov

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