IRS Sets New Rules for Tax Credit

The IRS has spelled out guidelines for eligibility for the home buyer credit when co-borrowers purchase a property.

• When a home-owning parent of an adult child co-signs for a mortgage and both names appear on the note, the IRS says that under some circumstances, the first-time home buyer can qualify for the whole amount.
• The IRS says the parent doesn’t qualify for any portion of the credit, but if the child hasn’t owned a home during the three years preceding the current purchase and can qualify based on income, he or she can be allocated the entire $8,000 credit.
• When unmarried individuals co-purchase a home and only one of them is eligible for the credit, then the full $8,000 can be allocated to the eligible buyer.

Source: Washington Post Writers Group, Kenneth R. Harney (12/04/2009)

Homebuyer Tax Credit Extended

Homebuyer Tax Credit Extended
First Time Homebuyers

• The guidelines stay pretty much the same. The maximum tax credit remains $8,000($4,000 for married filling separately) and anyone who has NOT owned a house during the last three years.
  
• Purchase a home by April 30, 2010
  
• Contract must close by June 30, 2010
  
• After Dec.1,2009,income limits rise to $125,000 for singles, $225,000 for married couples,currently $75,000 and $150,000 respectively. The tax credit phases out incrementally at each $20,000 increase in income.
  
• Maximum purchase price $800,000
  

Move-up Buyers(existing homeowner)

• May claim a tax credit up to $6,500
  
• The owner must have owned and used the same residence as primary for 5 conssecutive years in the previous 8 years.
  
• This is effective immediately.
  
• Income limits are the same as First Time buyers
  
• Buyers who are currently under contract, and may have passed otherwise the Nov 30th dealine, can now use the new guidelines.