Walter & Shuffain, P.C.
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The American Recovery and Reinvestment Act of 2009 includes a provision for first time home buyers that allows a refundable tax credit for homes purchased after January 1, 2009 and before December 1, 2009.
The tax credit is available to only first time home buyers, which is defined by the IRS as being someone who has not owned a principal residence during the three year period prior to purchase. For married couples, both individuals must meet this requirement.
Single family homes, newly constructed homes, townhouses, condominiums, mobile homes, and houseboats all are considered eligible homes for the purpose of the tax credit. Property held for rental purposes does not qualify for the home buyers credit, nor do vacation homes. The property has to be a principal residence and must be occupied for three years after purchase in order to avoid being subject to recapture rules.
If you purchased a home early in 2009 and claimed the $7,500 credit on your 2008 tax return, you are still able to claim the $8,000 refundable credit by amending your 2008 tax return.
Monetization of the credit is allowed by HUD which gives taxpayers the ability to apply the credit as a down payment for the purchase of a home.
If you would like more detailed information, please do not hesitate to contact us.