How to Utilize the First Time Home Buyer Credit

How to Utilize the First Time Home Buyer Credit

Beginning after April 8, 2008 and before December 1, 2009 taxpayers are eligible for the First-Time Homebuyer Credit. TO qualify you home must be purchased in the United States and you (and your spouse, if you are married) must not have owned any other main home during the three years preceding the date of purchase.

The credit is determined as the lesser of:
-10% of the purchase price of the house.
-$7,500 ($8,000 if the home was purchased in 2009). If you file as married filing separately, then the credit would be half of this amount.

You cannot qualify for the credit if any of the below items are applicable:
-Your Adjusted Gross Income is over $95,000 or $170,000 if married filing jointly.
-You home was financed using tax exempt revenue bonds. This is not applicable to 2009 home purchases.
-You are/were eligible for the District of Columbia first time homebuyer credit.
-You are a nonresident alien or you is not located within the U.S.
-You sell the home, or it ceases to be your main home, before the end of 2008.
-You acquired your home from a related person, including family members, relatives, or a business you directly or indirectly own more than 50% of.

Homes Purchased in 2008. Generally the credit is to be repaid over a fifteen year period while making equal installments starting in the 2010 tax year. If you home ceases to be your main home before the fifteen year period lapses, the unpaid balance is then due as additional tax on the corresponding yeas income tax return. This is applicable whether the home is sold, destroyed, condemned or converted to rental or business property.

Homes Purchased in 2009. You must repay the credit only if the home ceases to be your main home within the thirty-six month period beginning on the purchase date. This is applicable whether the home is sold, destroyed, condemned or converted to rental or business property. If the home remains your main home for the thirty-six month period you do not have to repay any of the credit.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com/