Here are new details on the Home buyers credit to clarify some misperceptions.
Homebuyer credit: Officially, it's called the "First-Time Homebuyer Credit." But, as the IRS's newly issued Form 5405 indicates, that title can be misleading. In general, you're considered a "first-time" homebuyer if you bought your main home in the U.S. after April 8, 2008 and before Dec. 1, 2009 and if you (and your spouse, if married) didn't own any other main home during the three-year period ending on the date of purchase. If you owned a home before that period, you still may qualify.
The credit works differently depending on when eligible taxpayers bought the home. If they bought last year, the credit essentially amounts to an interest-free loan that must be repaid over 15 years.
But it's even better if you're eligible and buy during the 2009 period: You don't have to repay the credit unless "the home ceases to be your main home within the 36-month period beginning on the purchase date," the IRS says.
In an unusual twist, eligible taxpayers who buy a home this year may claim the credit on their return either for 2008 or 2009.
Generally, the credit is $7,500, or $8,000 if you bought the home in 2009 (but only half of that amount if married filing separately), or 10% of the home's purchase price, whichever is smaller. But you aren't eligible if your income exceeds a certain amount. For example, you can't claim it if your modified adjusted gross income is $95,000 or more, or $170,000 or more if you're married and filing jointly.
You also can't claim it if the home is outside the U.S., or if you bought it from "a related person," such as your spouse or parents. For more details, see Form 5405 and the related instructions.
Source Wall Street Journal Online,2008 Taxes: New Benefits…and Confusion, March 7, 2009
