Monday, July 12, 2010
Closing deadline extended to Sept. 30 for first-time homebuyer tax credit
The Homebuyer Assistance and Improvement Act, which went into effect on July 2, 2010, extended the closing deadline for eligible home buyers who entered into a binding purchase contract on or before April 30 and were required to close on the purchase on or before June 30.
Here are five facts from the IRS about the First-Time Homebuyer Credit and how to claim it:
1. If you entered into a binding contract on or before April 30, 2010 to buy a principal residence located in the United States you must close on the home on or before September 30, 2010.
2. To be considered a first-time home buyer, you and your spouse – if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
3. To be considered a long-time resident home buyer, your settlement date must be after November 6, 2009 and you and your spouse – if you are married – must have 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.
4. The maximum credit for a first-time home buyer is $8,000. The maximum credit for a long-time resident home buyer is $6,500.
5. To claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract. New homebuyers must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property tax records or homeowner’s insurance records.
For more IRS information about the First-Time Homebuyer Tax Credit and the documentation requirements, go here.