Homebuyer Credit

The Tax Attic — with Jerry Coon

November 11, 2009 // 0 Comments

  First-time homebuyer credit extended Present homebuyer credit expanded A flurry of activity has occurred this past week in our federal government. Last Friday, Nov. 6, President Obama signed into law the Worker, Homeownership and Business Assistance Act of 2009. The main provisions of the bill extend the first-time homebuyer credit and expand the credit to present homebuyers. Our federal government has been in the habit lately of extending and expanding—mainly expanding. However, in this instance, I think this extension and this expansion are good things. The basics of the extension are two-fold. First, the $8,000 first-time homebuyer credit is extended to include purchases made from December 1, 2009, through April 30, 2010. Second, the credit will apply to contracts that are written as of April 30 as long as the actual close occurs before July 1, 2010. Under the current first-time homebuyer rules, the closing had to occur by this November 30. Now, taxpayers effectively have until next July to get all of their ducks in a row and get the $8,000. For purchases occurring in 2009, taxpayers will have the continued option to either file an amended 2008 return or wait to file the credit with their original 2009 return this coming tax season. This is actually an important decision. Currently, it is taking the Internal Revenue Service about 20 weeks to process an amended 2008 return and get the credit back to the taxpayer. They are checking out each credit carefully to make sure the applicant really does qualify for the credit. It goes without saying that $8,000 will bring out the worse in some people. So far, the IRS has prosecuted 153 taxpayers and tax preparers for filing fraudulent claims and they have another 800-plus claims that may be prosecuted. They have about 90,000 claims currently in process. As part of the amended return submission, we are attaching a copy of the closing document that clearly shows the closing date, the purchase amount, and the buyer. The buyer must coincide with the first-time homebuyer. Along with the closing document, we are also attaching a notarized statement from the buyer stating that the buyer has not owned a home in the past three years and does qualify for the credit. Hopefully, these […]