Now, a Few Words About the Other ($6,500) Home Buyer Tax Credit…
Most people have heard about the $8,000 tax credit for first-time home buyers. And that it has been extended to the spring. That means that the buyer must enter into a contract to purchase a home by April 30th and close the deal by June 30th. But not many people know about the other tax credit: the one for $6,500 available to exisiting homeowners if they buy a home (used as their primary residence) according the timeframe mentioned above.
I have asked Cameron Williams, an experienced CPA who specializes in real estate investment advice and planning, to write a few words about the new credit.
From Cameron Williams, CPA…
Long-time residents of the same principal residence, may be treated as a first-time home buyer under certain conditions. If an individual (and, if married, the individual’s spouse) who has maintained the same principal residence for any 5-consecutive year period during the 8-year period ending on the date of the purchase of a subsequent principal residence may qualify for a maximum credit of $6,500.
There are several other limitations that need to be considered. First, the new residence must be the new primary residence (for the 36 months from the purchase date), home must have been purchased from November 7, 2009 thru April 30, 2010, (unless under a written binding contract as of April 30, 2010, then you will have until June 30, 2010 to complete the purchase). The purchase price must not exceed $800,000.
The credit will start to phase out for a single taxpayer who’s modified adjusted gross income is between $125,000 and $145,000 ($225,000 to $245,000 for married filing joint return). There is no provision for the old principal residence to be sold to claim this credit.
You should consult your tax advisor to determine if you are eligible to receive this tax credit.
H. Cameron Williams, Jr., CPA
Duffy, Kruspodin & Company, LLP
Certified Public Accountants
4225 Executive Square, Suite 900
La Jolla, CA 92037-1485
Phone: (858) 642-5050 ext 2044
Fax: (858) 642-5065
Email: hcameron@dkllpcpa.com
