First Time Home Buyers Credit

There are home buyer tax credits available to first time homebuyers and long-term home owners who are moving residences. Some important facts about the credits will help you determine if you are eligible and how much you can claim.

First Time Home Buyers Credit

There are home buyer tax credits available to first time homebuyers and long-term home owners who are moving residences. Some important facts about the credits will help you determine if you are eligible and how much you can claim.

Beginning in February of 2009 up until the end of April 2010, if you enter into a contract to purchase a home in the US the purchase could be qualified for a credit with the IRS. To be a first-time homebuyer, you could not have owned a primary residence for the past three years. This also applies to your spouse.

Long-time homebuyers is a newer category that includes anyone that has lived in the same home for five years that is now purchasing a new primary residence. The credits are different for the two types of homebuyers, $8,000 for first time and $6,500 for long-term.

To claim the tax credit you have to file a paper return and attach the IRS Form 5405 to your return. Some additional documents will also need to be attached to provide proof of your home purchase during the required time period.

For the long-term home buyers, some proof of ownership is also needed. This could include a 1098 mortgage interest statement for the previous 5 years in which you lived in the home you sold. The credit is worth the extra paperwork, so get into contract prior to the deadline and receive a great tax credit on your 2009 tax return.

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