First Time Homebuyer Tax Credit ** UPDATED Filing Requirements

Tuesday, February 23, 2010

by Mark Rieger, Duke Warner Realty

Below you will find a recent article from The Washington Post which goes over the updated filing requirements for the first-time homebuyer tax credit. I hope you find this information helpful. Remember the deadline for being able to receive the tax credit has a requirement that you be under a binding contract to purchase a home no later than April 30, 2010 and the deal must be closed no later than June 30, 2010. If not, you will not receive the tax credit.

As always, if you have any questions, or if you or someone you knonw is looking to either Buy or Sell real estate in Central Oregon, please don't hesitate to call.

IRS clarifies the tax-credit paper chase

Despite back-to-back snowstorms that shut federal offices for days, the Internal Revenue Service issued new guidance last week on the two tax-credit programs that are powering the country's real estate markets -- the $6,500 credit for repeat buyers and the $8,000 first-time-buyer credit.

Filing Requirements - http://www.irs.gov/newsroom/article/0,,id=204671,00.html

2009 Tax Return

Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit (see the instructions for help with the form), and a properly executed copy of a settlement statement used to complete the purchase.

Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names, property address, sales price and date of purchase.
Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties' names, property address, purchase price and date of purchase.
Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Note Regarding Signatures: While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Long-Time Residents: The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period: