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TAX CREDIT Information for all Buyers
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2/9/10 IRS Update on Claiming the Tax Credit Important IRS updates on claiming the home buyer tax credithave recently been announced, and you may want to alert your potential customers. The agency has published an updated version of Form 5405 as well as instructions for home buyers using it to claim the $8,000 first-time buyer credit as well as repeat buyers seeking to claim the $6,500 credit. Updates to the form include the extended purchase date window (tax credit-qualified homes must be under contract prior to May 1 and close before July. And yes, even though the revised Form 5405 still references the "First-Time Homebuyer Tax Credit," it is also intended to be used by repeat home buyers, who must have lived in a single principal residence for five of the last eight years prior to purchasing their new home for which they plan to claim the tax credit.
Beyond these updates, the IRS is also requiring additional documentation for home buyers who claim the credit for purchases after Nov. 6, 2009. Buyers must now provide a copy of the HUD-1 form or, in cases where that form is not used, a certificate of occupancy for a newly constructed home. For purchases taking place after April 30, a copy of the signed sales contract must also be supplied. Meanwhile, in order to claim the $6,500 repeat buyer tax credit, home buyers must attach one of the following for five consecutive years of the last eight to demonstrate that they meet the repeat buyer qualifications: a Form 1098 reporting mortgage interest; a property tax statement; or home insurance records.
Tax credit buyers should also know that, due to the new documentation requirements, those claiming either the $8,000 first-time home buyer credit or the $6,500 repeat-buyer credit cannot e-file. As a result, taxpayers should be prepared to wait at least 12 to 16 weeks to receive their refunds. On a final note, NAHB has recommended options to Treasury and IRS officials for home buyers who do not use a HUD-1 form and whose local jurisdiction does not issue a certificate of occupancy. We are awaiting their response at this time. Get more information on NAHB's consumer tax credit Web site at: Federal Housing Tax Credit . |
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Kriss Ferrara
REALTY EXECUTIVES
7400 Route 611 ~ The Stroud Commons ~ Stroudsburg PA 18360
Office ~ 570 476-2424 Kriss Direct ~ 570 213-4099
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