$8,000 Tax Credit for First Time Home Buyers
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| One of the biggest credits for first-time homebuyers is the government's
$8,000 tax credit. If you're in the market for a
Brevard County Florida home and you qualify for the tax
credit, you'll have to purchase your home before December 1st of 2009. The tax credit is
equal to 10 percent of the home’s purchase price up to a maximum of $8,000. Eligibility
for the tax credit is determined by the settlement date. You must "Close" on your home
before December 1st of 2009. Close meaning buyer and seller signs all paper and the
loan if fully funded before December 1st of 2009. This tax credit does not
have to be repaid! First time home buyer: A first time home buyers in Brevard County Florida is anyone that has not owned a home in three years! 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 homeownership history of both the home buyer and his/her spouse. Income Limits: The income limit for Brevard County Florida single taxpayers is $75,000; the limit is $150,000 for Brevard County Florida 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. Down Payment: HUD will allow "monetization" of the tax credit. That means that HUD will allow Brevard County Florida 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 downpayment and closing cost expenses. Claiming The Tax Credit: Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase. Qualifying Homes: Any home in
Brevard County
Florida that will be used as a principal residence will qualify for the credit. This
includes single-family detached homes, attached homes like townhouses and condominiums,
manufactured homes (also known as mobile homes) and houseboats. The definition of
principal residence is identical to the one used to determine whether you may qualify for
the $250,000 / $500,000 capital gain tax exclusion for principal residences. |
The above information is for educational purposes only and may not be current. Readers must contact a tax profession for advice and should not rely on the above information to make any decisions. |
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