It just got better and also more complicated. On November 6 President Obama signed the Extended Homebuyer Tax Credit. The November 30 deadline is gone. The $8,000 cash incentive for first-time buyers has been extended to next year. Congress even added a $6,500 credit for current and former owners to buy again.
This new program is considerably more complicated because the number of eligibility criteria for both you and for the home you purchase, have increased. There are also many more policy guidances, to cover various scenarios for your income, purchase type (e.g., contract for deed), your relationship with the seller (brother?) or with a co-signer (parent?). It would be great to summarize it here, but it's just too extensive and complex now to synthesize to a few paragraphs. In fact, even the IRS hasn't even figured it out yet. As of this writing, the online IRS description of the extended homebuyer tax credit simply says "more to be added soon." So we'll just advise you to get professional assistance, starting with a realtor, mortgage lender or tax adviser.
Don't get too excited about the $6,500 repeat-homebuyer aspect just yet, though. You must have lived in your current principal residence at least five of the past eight years. That's right. A whole bunch of Americans haven't lived in one home for five years, ever, and never will. One wonders if this exclusion was a way for Congress to announce the new goodie-giveaway program without it actually costing so much. Or perhaps they intended this five year limit, aligned next to the first-time critiera, might be intended to result in equal numbers of takers for each of the two programs. Still, here are some very helpful overviews:
- "Home Buyer Tax Credits" on the web site http://www.federalhousingtaxcredit.com, provided by the National Association of Home Builders
- "Homebuyer Tax Credit", provided by the IRS (but as of this posting date, the IRS site simply addresses the first-time home buyer tax credit, and says "more later" will come about the repeat-owner homebuyer tax credit.
But please be careful what you read online. We have seen one particular detailed description of the program, claiming IRS policies on the homebuyer tax credit, posted and re-posted on dozens if not hundreds of blogs all over the country by blog authors who somehow forgot to give credit from where they copied the entire blog post. That means you can't know who was some 7th grader who may have written the original post as a hoax. That is one reason we are not trying to explain it here. If the IRS doesn't yet know the IRS policies, how would we? Be sure you go right to the source (e.g., IRS) for the only real dependable source of information.
And we wait...
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