If you purchased a home in 2009, or the first four months of 2010 and are a first-time homebuyer or a long-time resident purchasing a new home, you may be eligible to claim the First-Time Homebuyer Credit. Here are five key factors to consider when claiming the tax credit:
- You must enter into a binding contract to buy a principal residence on or before April 30, 2010. If you enter into a contract by this date, you must close on the home on or before June 30, 2010;
- A first-time homebuyer is someone who has not owned another principal residence during the three years prior to the date of the purchase;
- A long-term resident homebuyer is someone who has lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased;
- The maximum credit for a first-time homebuyer is $8,000 and the maximum credit for a long-term resident homebuyer is $6,500; and
- You must file a paper return and attach a Form 5405, which must include a copy of a properly executed settlement statement used to complete such purchase.
For more information about the First-Time Homebuyer Credit, including details about documentation and other eligibility requirements, visit: www.IRS.gov/recovery.
Randy M. Creighton, Esq.