- The $6500.00 Move Up Homebuyers Tax Credit is in NOW in effect (as of November 6, 2009.)
- If you owned and resided in your current home for a consecutive five out of the past eight years, and your adjusted household income doesn’t exceed $125,000 if you file taxes singly, $225,000 if you are married filing jointly — you can claim the credit as soon as you close on a qualifying house.
- There is no “move up” requirement in the new credit. In fact, homeowners who plan to downsize into a smaller dwelling may prove to be significant users of the credit, along with people who are relocating because of employment changes.
- Some other key features of the $6,500 credit you ought to know about:
- Whatever you intend to purchase, the house cannot cost more than $800,000.
- The replacement house must become your main home. There is no requirement in the legislation that you sell your current home. You could rent it out, turn it into a second home, or list it for sale later in 2010 when prices might be higher. If you plan to retain it, however, make sure you move into the new house on the day you close so that there is no question it was your principal residence at that time.
- The revised rules require taxpayers to submit copies of their settlement statements (HUD-1 forms), along with their requests for credits using IRS Form 5405. Congress’ new rules also prohibit individuals under the age of 18 or who are counted as dependents on another taxpayer’s filings from claiming the credit.
- Homebuyers in 2009 — those who go to closing after Nov. 6 but no later than Dec. 31 — can claim the $6,500 credit on their 2009 federal tax returns, or amend their 2008 returns. Similarly, eligible purchasers in 2010 will be able to file for the credit on their 2009 returns or 2010 returns.
- If you aren’t sure if you can make the deadlines established for the new credit — a binding contract by next April 30 and a settlement by June 30.
If you are in the market for a home, contact Terry Traylor at 713.705.1244 for a great mortgage rate and excellent service. Tell him Shannon sent you! I highly recommend Terry at Network Funding for my buying clients mortgage needs. Then you and I can go shopping for the home of your dreams!