| A New Opportunity for Home Ownership
On February 17, 2009 President Obama signed the
American Recovery and Reinvestment Act of 2009 into law. In
particular, the law authorizes a tax credit of up to $8,000 for
qualified first-time home buyers purchasing a principal residence on or
after January 1, 2009 and before December 1, 2009.
(Please note: This is guidance only, and you
should contact a professional tax consultant for a fuller explanation of
any particular provision.)
Frequently Asked Questions
What is the First Time
Homebuyer Credit?
A federal income tax credit of 10% of the purchase price
of the home up to $8,000.
What is
the definition of a first time homebuyer?
Generally, a buyer who has not owned a residence during
the three-year period prior to the purchase.
Who is
eligible to claim the credit?
Qualified first time homebuyers purchasing any kind of
home-new or resale.
What
types of homes qualify for the tax credit?
Any home purchased by an eligible first time home buyer,
used as a principal residence. The home may be a manufactured home, a
modular home and be real or personal property.
Are
there income limits to determine who is eligible to take the tax credit?
Yes. Modified adjusted gross income (MAGI) of up
to $75,000 for a single or head of household buyer or $150,000 for joint
tax-filers.
If my
MAGI is above the limit, do I still qualify for credit?
Possibly. A partial credit of less than $8,000 are
available for some tax-payers subject to phase-out limits.
Are
there any circumstances which qualified homebuyers may not receive the
maximum $8,000 credit?
In general, the credit is equal to 10% of the purchase
price and is capped at $8,000 for homes purchased in 2009.
I heard
the credit is refundable. What does that mean?
Refundable means that it can be claimed even if the
taxpayer has little or no federal income to offset. Should that be the
case, the IRS will issue a check to the homebuyer for the difference
between the tax due and the amount of the tax credit.
Does
the tax credit have to be paid back to the government?
There will be no repayment for purchases on or after
January 1, 2009 and before December 1, 2009, if the home is not sold for
three years.
I heard
there is a “recapture” feature in the provision. What does that
mean?
If the home is sold within three years of purchase, the
entire amount of the credit will be recaptured upon sale for homes
purchased during 2009.
Is the
credit available for homebuyers who receive government sponsored down
payment assistance?
Yes!
Find out additional eligibility
requirements and more information at:
www.federalhousingtaxcredit.com |
Mike's Homes, Inc.