Learn about credit for first-time homebuyers

There are a host of financial incentives provided by the federal government to encourage people to purchase their own home. The most important and largest of these is the one included in the Worker, Home Ownership and Business Assistance Law of 2009. In accordance with the provisions of this law, an amount of USD 8000 is extended as a credit amount tax on skilled workers for the first time. home buyers. This is a great monetary benefit for first-time homebuyers, as one does not have to pay this amount until the property is sold or is no longer used as the primary residence of the beneficiary who claimed the tax credit.

What are the necessary conditions that must be met in order to qualify for this tax credit? According to the IRS definition, a first-time homebuyer is someone who has not purchased a residence in the three years immediately preceding their purchase. Single buyer and married couple income levels have been set above which the tax credit is not available. For properties purchased between the periods of January 1, 2009 to November 05, 2009, the maximum income level of a single buyer must be less than USD 75,000 and in the case of couples who are co-owners, the income levels cannot be exceed USD 150,000. Likewise, for sales operations executed from November 6, 2009 to April 30, 2010, the maximum income level could be USD 125,000 and USD 250,000 for single buyers and couples, respectively. You can apply for a joint credit only if neither of the spouses has bought a house in the last three years. The couple still has the option to take out a loan by buying the house as a sole buyer in the name of the spouse who has not bought a house in the last three years.

Some important points to note about the first-time homebuyer credit include the fact that the amount of tax credit available depends on the price of the property. The tax credit available is equal to ten percent of the purchase price of the property, with USD 8,000 being the maximum amount that can be claimed. The other key point to note is that not all homes purchased would qualify for this rebate. Only those houses with a maximum price of USD 800,000 would be considered for homebuyer credit. To be included in the list of beneficiaries, you must ensure that you purchase a house before April 30, 2010, sign the necessary contract documents and complete the sale before June 30, 2010 to be eligible under this scheme.

The process of making a homebuyer credit claim is easy. Submit two returns, namely the HUD-1 Settlement Statement and the IRS 5405 and walk away with a maximum credit of $8,000 as long as you meet the eligibility conditions stipulated by the federal government. The IRS allows anyone who purchases a home in 2010 to file an amendment to their 2009 tax return and file a claim.

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