$8000 Tax Credit for Long Beach First Time Home Buyers - Long Beach Real Estate$8000 Tax Credit for Long Beach First Time Home Buyers-General Guidelines - Long Beach Real Estate
Who is qualified to claim the tax credit?
First time buyers purchasing between 1/1/2009 and before 12/1/2009. First time home buyer defined:
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the homes purchase price up to a maximum of $8,000. What are the income limits for claiming the tax credit?
The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519. Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information. Is there any way for a home buyer to access the money allocatable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment. The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain down payment and closing cost expenses. Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000. If Im qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount. Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
This is a brief overview of the details related to the Federal Housing Tax Credit. Further details can be found here. There are a lot of details related to applying this tax credit. The information on this article should not be construed as legal or financial advice, it is for general information purposes only, we strongly advise consulting your tax advisor prior to making any decisions. . If you are thinking about buying a Long Beach home, a Long Beach condo or a townhouse in Long Beach please give us a call for a comprehensive overview of the real estate market in Long Beach and for a free consultation (562) 212-5420.
Important Long Beach Home Buyer Tips This important article highlights issues that
many first time home buyers do not consider, that being the remaining
life of the existing systems currently in the home and the cost of
future replacement: Long Beach Realtor
(562) 212-5420
http://www.longbeachrealestatehome.com/009CB6 Posted on October 16, 2009 06:00:00 by Laurie Manny
 Laurie Manny  1 feedback »
Comment from: Janet [Visitor] · http://www.newhomesmatch.com/  good info. there is even a large chance that the tax credit will be extended into 2010. this is great news for new home buyers and our economy.  Permalink September 30, 2009 14:58:29Comment on this article This post has no comments awaiting moderation. |
Time is running out to take advantage of the $8,000 first time buyers tax credit. In order to claim the credit you will have to close escrow by midnight November 30, 2009. With many escrows running over 30 days this means that you will have to locate the property fairly quickly, have your offer accepted and close escrow in time to qualify. 
To begin your search for the perfect home or to sell your home in the Long Beach area, begin your journey by calling Laurie Manny at (562) 212-5420.
