When the law was changed to extend and expand the credit, IRS changed the requirements on the new Form 5405 and the instructions for claiming the tax credit.  The new requirement state that a FINAL Settlement Statement signed by ALL parties must be attached to their personal (1040) tax return. 

* If you have a pending transaction and are planning to obtain this tax credit – please notify your Escrow Officer right away. This will help aid in getting the escrow authorization forms signed through closing (while we transition with this requirement).

IRS Releases New Forms, Instructions

The IRS has released IR-2010-006 providing a revised Form 5405 to reflect the changes to the tax credit made in the extension and expansion legislation enacted in November 2009. The release reminds taxpayers that all tax returns claiming the tax credit must be filed manually (i.e., they cannot utilize the IRS E-File automatic system). The revised form includes a section for those repeat buyers who are eligible to claim the $6500 tax credit. The HUD-1 or evidence of the transaction must be filed with all returns claiming the credit (both the $8000 and $6500 credits). Individuals who claim the repeat buyer credit must also provide evidence that they have owned and used the prior residence for five consecutive years. The instructions indicate that property tax or homeowners insurance records are sufficient for this purpose.

Click here for:

IRS release, instructions, and forms

The Home Buyer Tax Credit

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as 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.

As always, if you or anyone you know is looking to either Buy or Sell real estate anywhere in Central Oregon, please let me know.