Buy Now and Take FULL Advantage of the $7,500 Tax Credit?
Are you thinking about buying your first home, but not quite sure if now is the right time? It might be your lucky day, thanks to the new economic stimulus package.
With the new stimulus package, when passed, new homebuyers will have a chance to qualify for a $7,500 tax credit and unlike before, this credit would not have to be repaid.
Previously the stimulus program offered a credit of up to $7,500 to purchasers who had never bought a house or hadn’t owned one during the previous three years. To qualify, taxpayers would have had to close on a house between April 8, 2008 and July 1, 2009.
But as many would expect, most consumers were relatively opposed to the plan because unlike other federal tax credits, this one had to be repaid in full to the IRS within 15 years. Under the new approved bill, loans would not have to be repaid for homes bought after Jan. 1, 2009.
Qualifications (provided by CNNMoney.com):
• The $7,500 is available to singles, married couples filing jointly and unmarried co-purchasers, provided they meet the non-ownership test for the previous three years. Married couples filing singly can claim up to $3,750 each. Unmarried individuals can allocate the credit on their filings according to their respective ownership shares or capital investments in the house.
• Only principal residences — or in the IRS’ words, “the one you live in most of the time” — are eligible. No second homes, investment properties or houses located outside the United States will pass the test. However, the definition of “home” extends far beyond conventional houses sited on lots. It “can be a … houseboat, house trailer, co-op apartment, condominium or other type of residence,” according to Form 5405. For example, if you buy a sailboat or powerboat with full living facilities, tie it up at a marina, and make it your “main home,” you could be eligible to claim the credit, though you may want to run all the specifics of your situation by your accountant or tax adviser.
• Even if it’s your first home purchase, you are not eligible if your adjusted gross income is above $95,000 (single filer) or $170,000 (married joint filers). Married couples with incomes between $150,000 and $170,000 are eligible for reduced credits, based on a phase-out schedule. Single filers with incomes between $75,000 and $95,000 are also subject to reduced credit limits. Taxpayers who use tax-exempt mortgage bonds issued by state or local governments to finance home purchases also are ineligible.
• You can’t claim the $7,500 credit if you buy your house from a “related person,” meaning a spouse, parents, grandparents, children or a corporation or partnership where you own more than 50 percent of the stock or capital interests.
So go ask your financial advisor today to see if you qualify!






















Interesting tidbit here. Thanks for sharing New West.