Skip to main content

IRS issues new guidelines on obtaining home buyer tax credits




  • The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500. Click here for more information about the federal tax credit for home buyers, including eligibility requirements.

  • To receive the tax credit, home buyers must comply with the IRS’s documentation requirements, including a fully executed IRS Form 5405. On the form, which is available on the IRS’s Web site, taxpayers provide information supporting their claim of eligibility, such as income and home purchase date. LA Times story

  • The IRS also requires home buyers to submit a copy of the closing or settlement statement that proves the transaction took place. The IRS previously said that the statement should show “all parties’ names and signatures, property address, sales price, and date of purchase.” However, since closing or settlement statements vary by state, and in some cases the form does not include both the seller’s and buyer’s signatures, the IRS has revised this requirement. As long as the closing or settlement statement conforms to prevailing local practices, the IRS will accept it.

  • One stipulation for repeat buyers is they must provide documentation they lived in their former property for a consecutive five years out of the previous eight years. Accepted documentation may include property tax records, hazard insurance records, or copies of annual mortgage interest statements filed with their federal taxes.

Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

CASH For Appliances - Just in Time for the holidays

CASH for Appliances— Coming Your Way SOON!! By the end of 2009, consumers nationwide will be able to take advantage of a federal "cash for appliances" program offering rebates on purchases of a wide array of home appliances certified as energyefficient by the EPA's Energy Star program. Backed by an initial $300 million in funding from the American Recovery and Reinvestment Act, the state-run rebate program is intended to help make American homes more energy-efficient while further stimulating the economy. Who Will Run the Program? Each state will administer its own cash for appliances program. The states will be free to select which residential Energy Star qualified appliances to include in their programs and the individual rebate amount offered for each appliance. What Can You Buy? The Department of Energy (DOE) has recommended that the states focus their cash for appliances rebate efforts on heating and cooling equipment, appliances, and water heaters as these products ...
Post a Comment
Read more

Proposition 8 - Can reduce your property tax bill

Today I would like to try to save you and your friends some cash on your next property tax bill. If you currently don't own real estate please feel free to forward this email to your friends and family that may benefit from Prop 8. Proposition 8 – What is it? Will it save you money? In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.” A decline-in-value occurs when the current market value of your property is less than the current assessed value as of January 1. If you purchase d your home or investment property during or after 2003 your current assess ed value may qualify for a reduction. Spring is the time to utilize Prop 8 and start saving money on your property taxes! One client I counseled recently will save over $135.00 per month on their property taxes. You can save about 1.25% for each dollar of reduced assessment. For example if your property ass...
1 comment
Read more