Showing posts with label tax credits. Show all posts
Showing posts with label tax credits. Show all posts

Wednesday, March 3, 2010

How to Get the Extended Home Buyer Tax Credit

You’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here's what you have to do to get your benefit:

  1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract by April 30, 2010 and close by July 1, 2010.
  2.  Decide whether to: 
    • apply the credit to your 2009 tax return, filed on or before April 15, 2010;
    •  file an amended 2009 return; or, 
    • apply the credit on your 2010 return, filed on or before April 15, 2011.
  3. Attach documentation of purchase to your return.

Documentation of Purchase

Details concerning the precise documents required to confirm your purchase have not yet been released. When this information becomes available, we will include instructions and links to the appropriate forms.

When to Apply the Credit

Buyers purchasing homes on or before December 31, 2009 may claim the credit on their 2009 tax returns.

Buyers purchasing in 2010 will have the option to:

  •  Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
  •  File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
  •  Claim the credit on their 2010 tax returns.

If you, or your client, purchased a home between January 1, 2009 and November 6, 2009, please see: How to Get the 2009 First-Time Home Buyer Tax Credit.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

  1. Fill out Form 5405 to determine the amount of your available credit;
  2. Apply the credit when you file your 2009 tax return or file an amended return;
  3. Attach documentation of purchase to your return or amended return.

Posted via web from The Newport Beach Lifestyle

Friday, February 26, 2010

Better to Wait Until Home Buyer Tax Credit Expires?

The home builders and Realtors are jazzed for the home buyer tax credit’s remaining weeks. It’s tempting for home buyers to get caught up in the hype. But perhaps you’re better off waiting?

In case you missed the news, the federal government will give you money if you buy a house–$8,000 for first-time buyers and up to $6,500 for current homeowners within certain price and income limits. The benefit covers buyers who enter into contracts before April 30 and close by June 30.

Over at Zillow’s Blog, they’re debating a Denver reader’s question: “It it better to buy now or wait until the credit expires?” He explains that competition is heated in his price range of below $150,000 in Denver and wonders if that will ebb after April.

Answers are mixed. One commenter says that prices will fall after the credit expires: “I’ve seen prices in my neighborhood jump up over $30k since the credit started,” he writes. Indeed, some analysts have argued that the benefit of the tax credit has been priced into the market and that by stimulating demand, home sellers have been able to hold off on steeper price cuts. When the credit expires, the thinking goes, home prices could fall a bit to compensate.

Others tout low mortgage rates. As we’ve written, these historically low rates may rise in the months ahead as the Fed pulls back on its mortgage purchase program–or they may not. Chances are fair that the Fed extends the program. One fellow, with the handle “NYC condos,” writes “I truly wish this meant more in Manhattan.” (Ed. note: Us, too!)

Of course, every market’s different. In Las Vegas there’s a flood of investors (with cash) who are scooping up “bargain-priced” foreclosed homes, as James R. Hagerty wrote this week. Inventory is shrinking and competition for these homes is heated, making it tough to find something to buy. One renter says he’s been outbid eight times trying to get a house. It doesn’t look likely that the credit’s expiration will quell the frenzy.

Readers, are any of you waiting out the tax credit in the hopes that prices will fall further?

Posted via web from The Newport Beach Lifestyle

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