As you might imagine, the homebuyer tax credit has been an especially hot topic at BIDaWIZ. One of the interesting phenomenons that we’ve noticed is that a lot of our users that applied, or were thinking about applying, for the homebuyer tax credit actually decided to file a tax extension because they couldn’t get their papers completed and/or purchase the home in time.
Why is this significant?
Well, it’s important to note that they may have done this because tax return extensions aren’t due until October 15th & this gives them extra time with the homebuyer tax credit. If you think about dates, extending the closing date to September 30th, & even beyond, makes a lot of sense from a tax perspective.
Extension is for the Closing Date
But, just to be clear, extending the closing date does NOT mean that the deadline for purchasing a home was extended past the no later than April 30, 2010 deadline. The April 30th purchase date deadline remains unchanged.
What does “First-Time Home Buyer” technically mean?
It doesn’t mean that this is the first home you’ve ever purchased. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. So even if you owned a house from 1993 to 2002, but haven’t owned since, you qualify. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
Current Homeowners looking to Buy a New Home
What about if you’ve owned a home for a long time and are looking to buy a new one? What then in terms of tax credit? A slightly more complicated question, but we’ll break it down. If you are a long-time resident and owner of the same main home and you buy a new home, the law may allow you to claim a homebuyer credit of $6,500. The new home must be under binding contract before April 30, 2010 and closed by June 30, 2010.
More Tax Questions?
If so, our Tax Wizards – who know this stuff inside and out – are happy to help answer all of your tax questions.
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