The definition of "first-time home buyer" for the purposes of this credit is anyone who hasn't owned a primary residence at anytime during the 3 years prior to the date of purchase. This means if a buyer purchases a home on April 1, 2010, they will not qualify for the $8000 credit if they owned or had ownership interest in a home anytime from April 1, 2007 through the date of the purchase agreement. But, they could have owned a home prior to April 2007 and still qualify as a "first-time home buyer." Married joint filers must both meet the first-time home buyer criteria to claim the credit on a joint return. The definition of "repeat home buyer" for the purposes of this credit is anyone who has owned the same primary residence for 5 consecutive years during the previous 8 years before purchasing the new residence. This means if a buyer purchases a home on April 1, 2010, they will qualify for the $6500 credit if they owned or had ownership interest in a single primary residence for 5 consecutive years from April 1, 2002 through the date of the purchase agreement. If the purchaser owned a home during that period, but for less than 5 consecutive years, they will not qualify for a credit. The law requires that the home be the "primary residence" meaning you spend 50% or more of your time there. It can be a condo, single-family detached, co-op, townhouse or something similar. Vacation homes and rental properties are not eligible. If the home is new construction, the "purchase date" is the date you occupy the home. The new credit is an $8000/$6500 refundable tax credit meaning that if your total tax liability in the given year is less than your eligible credit amount, the IRS will send a refund for the balance. There are a few restrictions on who can take the credit. If any of the following scenarios apply, you may not qualify for the credit: Your income exceeds $125,000 as a single person or $225,000 as a married couple filing jointly. There is a $20,000 phaseout range up to $145,000/$245,000 that allows for a partial credit based on a calculation explained below. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild. You stop using your home as your primary residence. You sell your home before the end of three years You are a nonresident alien. Now to explain the phase-out range. For single filers, the phase-out starts at $125,000 and for married filers it begins at $225,000. This means that for singles making over $125,000 and couples making over $225,000, the credit is proportionately reduced as incomes approach the $145,000/$245,000 respective limits. So if a couple's joint MAGI is $140,000, they would be $15,000 over the full credit limit. $15,000 is 75% of the $20,000 phase-out range, so 75% (or $6,000) of the $8,000 credit would be disallowed and the couple would receive a $2,000 credit. A few notes about filing for the creditâ€Â¦ If you qualify, you can claim the tax credit on your 2009 income tax return (to be filed by April 15, 2010). If you have already filed, you can amend your 2009 return via the appropriate paperwork, or you can wait and claim the credit on your 2010 income tax return. You are allowed to decide which year you will claim the credit based on your income. For example, if your 2008 MAGI exceeds the income limits or enters the phase out range and you believe your 2010 income will be less (so that you would qualify for more of the credit), you can wait to claim the credit on your 2010 income tax return. Of course there are even more provisions to this federal tax credit than are explained in this flyer. If a buyer takes the tax credit and then sells the home prior to the end of three years of ownership, the tax credit must be repaid. This is to prevent flipping homes in order to get the credit. We strongly recommend that you discuss your personal tax situation with your tax advisor. In Florida I recomend Service Business Solutions PLLC in Naples.www.servicebusinesssolutions.com.I WILL FILE EITHER YOUR AMENDED OR 5405 FORM SO YOU CAN GET YOUR TAXES PREPARED AND GET YOUR $ 8000.00 CREDIT FILED FOR FREE! America Home Key Inc Florida 2059 Trade Center Way . Naples Fl 34109 Telephone (239) 580-9977 Fax (239) 596-0507www.americahomekeyfl.com
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