Need a Last Minute 2008 Tax WriteOff? Try Using the $8,000 Tax Credit for Buying a Home in 2009

Need a Last Minute 2008 Tax WriteOff? Try the $8,000 Tax Credit for Buying a Home in 2009
by Michelle C. Carr-Crowe, ABR, ASP, PME, RECS, SRES

This is a tip from one of my preferred mortgage consultants, Clay Edwards of Rooftop Lending.

According to Clay, people who intend to buy a condo, townhome or single family home in 2009 (or have already purchased a home in 2009) can actually elect to take the $8,000 tax credit on their 2008 tax filing.

Obviously, you need to verify whether this strategy is a good fit for your unique situation with your tax professional. If for some reason you DON'T buy in 2009, you'll need to pay it back.
However, this is a unique opportunity for people who intend to buy a home in 2009, whether they're in San Jose, Saratoga, Cupertino, Santa Clara County or anywhere else in the country and need an additional tax credit for 2008.

You can find more information on the tax credit included in the info below:
Frequently Asked Questions About the $8,000. Federal Tax Credit, taken from www.irs.gov Web site and paraphrased by yours truly.

How much is the tax credit?
The tax credit would be $8,000 or 10% of the purchase price, whichever is less.

Who is eligible?
Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit (included in the 2009 economic stimulus plan) is available for the purchase of the primary residence by first-time homebuyers.

How do I know if I qualify as a first-time homebuyer and am eligible for the tax credit?
According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit. KEY POINT: if only one spouse owned a home before, the other spouse can still qualify for the tax credit!

Do I have to repay the $8,000.?
NO! Unlike the previous $7,500 tax credit, the $8,000. does not have to be repaid!
EXCEPTION: IF the home is sold within three years of purchase, then at that time, the credit will be reversed.

Are there any income limitations on the tax credit?
Yes. The tax credit is strictly for individuals with adjusted gross income of under $75,000 or $150,000 for joint filers.

Thanks for reading & Happy Filing! Remember, your taxes MUST be postmarked by midnight on April 15th to avoid late fees and penalties.

Michelle C. Carr-Crowe is a fulltime real estate consultant with San Jose-based Altas Realty, specializing in residential property thrutout the West Valley area of Santa Clara County, especially Lynbrook High and Cupertino Schools. Just Call...(408)252-8900.