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Over the last few months I have had an enormous amount of questions come my way on the new 2009 First Time Homebuyers Tax Credit. Here are the basics about the 2009 First Time Homebuyers Tax Credit:

· The credit is available for first homebuyers that purchase a home between January 1, 2009 – December 1, 2009.
· A first time homebuyer is defined as someone who has not owned a home in the last three years
· Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
· You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces, and others
· The credit amounts to 10% of the purchase price of the home not to exceed $8,000
· The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling it

COMMON QUESTIONS AND ANSWERS TO THE 2009 FTHB TAX CREDIT:

Once I have closed on my home and I am ready to file for my tax credit how do I get started?

You will need to pick up tax form 5405 at your local CPA/Tax Preparer office or go online at www.irs.gov. There on the form you will need to fill in the date of closing and new address along with your other tax information. Once the form is completed it can be filed with the IRS.

Do I really get $8,000 in my pocket from the IRS?

Yes, it is an actual $8,000

If I am already getting a tax refund back do I get the $8,000 in addition to this?

Yes, the tax credit is in addition to your normal refund

If I have not paid $8,000 in taxes can I still get the tax credit?

Yes you are still entitled to the full tax credit.

Can I file for my tax credit before I close on my home so I can use the money for my down payment?

No. For two reasons: (1) It takes anywhere from 8-12 weeks to get the money back from the IRS and (2) The 5405 requires you to put the closing date of when you closed on your home. Since you have no ownership interest in the property you are purchasing yet, then you cannot file for the credit.

Are mobile homes eligible for the Homebuyers Tax Credit?

Yes. The guidelines state that the following types of properties are eligible: House boat, house trailer, cooperative apartment, condominium, or other type of residence. It has to be the one you are occupied in most of the time. No second home or vacation properties.

Can I still file in 2008 for my tax credit and get my money this year?

Yes, you can file the 5405 anytime up until December 1, 2009 and still get the money this tax year. If you have extended your taxes for 2008 and you have closed on your home you can just attached the 5405 form to the rest of your tax return.

Do both spouses have to be first time homebuyers to receive the credit?

Yes. However, if they are married filing separate they will split the return on the credit.

Can the tax credit be split amount those who are buying the home if they are not married?

Yes they can split it.

If I have any other questions or would like more information on the tax credit where can I get it?

You can go online to IRS.gov and search for form 5405. There it will tell you more information about the credit. Or, if easier, you can give me a call at (949) 215-9699 and I will be more than happy to answer any specific questions you may have or find the answer to your questions.

I hope this information has been of great value to you.  My goal in my practice is provide valuable financial services to all that I serve through education and prudent financial advice.  If you know of someone looking to purchase a home or have thought about it yourself please give me a call at (949)215-9699, go to www.suncoastloan.com or  www.suncoastgroupfinancial.com or send me an email, now is still the time to buy with interest rates being still at historic lows and by taking advantage of the FTHB Tax Credit.  I appreciate your business and look forward to the opportunity to serve you soon. Suncoast Group financial.