First Time Homebuyer Credit

[zeros]

Apparently this is for 4/9/08 and thru 6/30/09. If an eligible homebuyer decides to purchase in 2009, can he claim this credit on his 2008 return?

[solomon]

That is correct.

[Nashville]

Timing

Solomon says you can take the credit on your 2008 return.

Does the event have to occur prior to taking the credit, or can a taxpayer take the credit on simply "planning" to buy a house. (If the latter is true, we tax prep folks are going to be in a quandry).

Example, taxpayer plans to close on a house on May 1. Can he:
a) File his tax return on April 15 and take the credit in anticipation of buying, or
b) File an extension, then file his tax return on May 15 after the house has been bought?

Notice this question has nothing to do with how the mortgage company applies the $7500 credit as a down payment. That is a very worthy discussion, but not the same as this question.

[solomon]

Solomon says you can take the credit on your 2008 return.

Does the event have to occur prior to taking the credit, or can a taxpayer take the credit on simply "planning" to buy a house. (If the latter is true, we tax prep folks are going to be in a quandry).

Example, taxpayer plans to close on a house on May 1. Can he:
a) File his tax return on April 15 and take the credit in anticipation of buying, or
b) File an extension, then file his tax return on May 15 after the house has been bought?

Notice this question has nothing to do with how the mortgage company applies the $7500 credit as a down payment. That is a very worthy discussion, but not the same as this question.

The law is clear that the house must be purchased - not planning to do so.

From HR 3221:

An election is provided to treat a home purchased in the eligible period in 2009 as if purchased on December 31, 2008 for purposes of claiming the credit on the 2008 tax return and for establishing the beginning of the recapture period. Taxpayers may amend their returns for this purpose.

[taxea]

First Time Homebuyer Credit

Didn't I read somewhere that this "credit" is actually a "loan" and at some point needs to be recouped at some time? taxea

[MLINDER42]

Home buyers credit

It is an interest free loan.Paid back over fifteen years starting the third tax return after the loan.

[DaveinTexas]

Here's a great site

Didn't I read somewhere that this "credit" is actually a "loan" and at some point needs to be recouped at some time? taxea

that explains almost every situation you may encounter: http://www.federalhousingtaxcredit.com/faq.php

The one situation that wiil trip up most is a newlywed couple buying their first home together, but one of the spouses had ownership of a P.R. in the last three years. That spouse disqualifies the credit for the other spouse; bummer.

Check out the site; it even explains the income phaseout; oh there's one of those too!!