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Congress just extended and expanded the homebuyer tax credit that was set to expire November 30th. The new rules have extended the tax credit timeframe as well as increased the pool of potential tax credit recipients to cover individuals and couples that currently own their homes. Another major shift was the increasing of the income cap that limited how much money a person could make in a year and receive the tax credit. The good news for buyers who weren’t able to find the perfect home in time for the previous deadline is that the tax credit is still available for you. The tax credit is also available now to current home owners who were hoping to move out of their homes. The table below outlines the differences of the two tax credits and the changes that have been made.
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FEATURE
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Jan 1 – November 30, 2009
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December 1–April 30,
2010
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Firsttime
Buyer –
Amount of Credit
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$8000
($4000 married
filing separate)
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$8000
($4000 married
filing separate)
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Firsttime
Buyer –
Definition for Eligibility
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May not have had an interest
in a principal residence for 3
years prior to purchase
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Same
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Current Homeowner –
Amount of Credit
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No Provision
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$6500
($3250 married
filing separate)
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Effective Date –
Current Owner
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No Provision
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Date of Enactment
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Current Homeowner –
Definition for Eligibility
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No Provision
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Must have used the home
sold or being sold as a
principal residence
consecutively for 5 of the
previous 8 years
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Termination of Credit
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Purchases after
November 30, 2009.
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Purchases after
April 30, 2010
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Binding Contract Rule
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None
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So long as a written binding
contract to purchase is in
effect on April 30, 2010, the
purchaser will have until
July 1, 2010 to close.
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Income Limits
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$75,000 – single
$150,000 – married
Additional $20,000 phase out
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$125,000 – single
$225,000 – married
Additional $20,000 phase
out
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Purchase by a Dependent
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No Provision
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Ineligible
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Antifraud
Rule
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None
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Purchaser must attach
documentation of purchase
to tax return
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