First time homebuyer credit

[Bucky]

Is the credit based on the contract sales price or can you include settlement cost also.

[dsi]

Bucky, I'm going to say it is based on the "purchase" price. No consideration is given to any other costs.

[AJsTax]

I just had to find it

Bucky, I'm going to say it is based on the "purchase" price. No consideration is given to any other costs.

There is an explanation of purchase price in the directions for the form. Closing costs are included. Everything that would be included if you were figuring basis on the property.

copied from form 5405
"Purchase price. The purchase price is the adjusted
basis of your home on the date you purchased it. This
includes certain settlement or closing costs (such as legal
fees and recording fees) and your down payment and
debt (such as a first or second mortgage or notes you
gave the seller in payment for the home). If you build, or
contract to build, a new home, your purchase price can
include costs of construction. For more information about
adjusted basis, see Pub. 551, Basis of Assets."

[Jesse]

Ha -
Me too, so I looked up pub 551 and I think this might help:

http://www.irs.gov/publications/p551/ar02.html#d0e301

[Bucky]

Thanks AJ and Jessie. That is the same conclusion I came to and did include closing cost.