First Time Homebuyer Credit Finally a Done Deal

President Obama signed the stimulus plan on Tuesday, February 17. Most of the mechanics of the credit are the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unussed, then the unused amount will be refunded as a check to the purchaser. The National Association of Realtors sent out a nice chart on the first-time homebuyer tax credit. If you didn't receive a copy and would like one, send an e-mail to lbohlen@previewproperties.com. I used their chart for the following bulletpoints:

• The maximum credit amount is the lesser of 10 percent of cost of home or $8,000.
• Any residence used as a principle residence is eligible.
• Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amunt of tax credit refunded to purchaser.
• Full amount of credit available to individuals with adjusted gross income of no more thant $75,000 ($150,000 on joint return). Phases out above those caps up to $95,000 and $170,000.
• Purchaser (and purchaser's spouse) may not have owned a principle residence in 3 years previous to purchase.
• Purchasers who utilitize revenue bond financing can use credit.
• No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
• If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchasedin 2009.
• All revisions are effective as of January 1, 2009.
• 2009 purchasers can make an election to claim the credit on their 2008 tax return.
• Eligible 2008 purchasers will still be required to repay the credit.