Obama Stimulus $8000 First Time Home Buyer Tax Credit Ends Dec 1st!

By Author: Ann Ebenezer
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If you are a first time home buyer and want to claim the $8000 first time home buyer tax credit, make sure you meet all the guidelines and restrictions. To qualify for the $8,000 stimulus
tax credit, it must be your primary residence and you must fall under a certain income bracket. You can claim the $8000 first time home buyer tax credit if you make up to $75,000 for individuals, $150,000 filing jointly. The tax credit begins to phase out after that, and is eliminated at $95,000 ($170,000 for joint filing) of income.

Here's what you need to know: An individual first-time buyer (or someone who has not owned a home in three years), who has an adjusted gross income of up to $75,000 can qualify for up to the full $8,000 tax credit. The tax credit is structured as 10 percent of the purchase price up to $8,000. Married couples may earn up to $150,000 and qualify for the full amount of the tax credit.
The tax credit begins to phase out over $75,000/$150,000 and phases out completely at $95,000 for individuals and $170,000 for married couples. The IRS has posted a revised version of Form 5405, First-Time Homebuyer ...
... Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009, and the form's instructions includes additional information on who can and cannot claim the credit, income limitations and under what circumstances the credit must be repaid.
What Are The Residency Requirements For the Tax Credit?
You must live in the property as your primary residence or "main" property. The IRS defines "main property" as a house, houseboat, house-trailer, cooperative apartment, condominium, or other type of residence. If you are building or buying new construction, the date of occupancy is the date which you can count for the tax credit. For most home buyers, this will be the date you close on the house and move in, not the date you close on the construction loan or sign the contract.
You must live in the property as your primary residence or risk having to repay some or all of the tax credit.
What if I Owned a House and My Wife Wasn't On Title or The Mortgage. Will She Qualify as a First Time Buyer?

IRS law defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase. If you're married, the law requires neither you nor your spouse to have been homeowners for the prior three years. However, if you're unmarried partners, and one of the partners qualifies as a first-time home buyer, that person may receive up to a $4,000 tax credit.
What if I Own a Vacation Home? Am I Still A First-Time Buyer?

Ownership of a vacation home or a rental property does not disqualify you as a first-time buyer in the eyes of the program. You must have owned a principal residence.
Who Cannot Claim The $8,000 Tax Credit?
According to the IRS, you cannot claim the $8,000 tax credit if:
1. Your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly).
2. You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any tax year. This rule does not apply for a home purchased in 2009.
3. Your home financing comes from tax-exempt mortgage revenue bonds. This rule does not apply for a home purchased in 2009.
4. You are a nonresident alien.
5. Your home is located outside of the U.S.
6. You sold the home, or it ceased to be your main home, before the end of 2008.
7. You acquired your home by gift or inheritance.
8. You acquired your home from a related person, including your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.); A corporation in which you directly or indirectly own more than 50 percent in value of the outstanding stock of the corporation; A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.
Who must repay the Tax Credit?
You must repay the credit only if the home ceases to be your main home within the 36-month period beginning on the purchase date. This includes situations where you sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation. You repay the credit by including it as additional tax on the return for the year the home ceases to be your main home. If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit.
If you and your spouse claim the credit on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit.
Exceptions. The following are exceptions to the repayment rule.
1. If you sell the home to someone who is not related to you, the repayment in the year of sale is limited to the amount of gain on the sale. When figuring the gain, reduce the adjusted basis of the home by the amount of the credit.
2. If the home is destroyed, condemned, or disposed of under threat of condemnation, and you acquire a new main home within 2 years of the event, you do not have to repay the credit.
3. If, as part of a divorce settlement, the home is transferred to a spouse or former spouse, the spouse who receives the home is responsible for repaying the credit.
4. If you die, repayment of the credit is not required. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the credit.
For more details, see IRS Form 5405 or APPLY ONLINE