A Realtor emailed me the following:

[AZ-Tax]

", I have weird question for you. Our broker is saying that if you buy a house in 2009 you can take the $8K tax rebate on your 2008 taxes. So in other words, they are telling us to advise our clients that purchase to amend their 2008 taxes and claim the 8K. Is that true?"

If and when I do reply, I do plan on staring my reply with "I hope your broker included please consult with your tax advisor, consultant or preparer".

If the broker is referring to the 'First home buyer credit", the amt is $7500 or was that increased to $15K? Also there is qualifications like TP cannot owned a home for the last 3 yrs prior and their is a AGI phase out plus a couple more stipulations. I do see on page 11-4 left column under "purchase date" that the TP who purchased in 2009 has the option to claim the credit on their 08 return if filed an extension or amend their 08 tax return if purchased thru the qualifying period of 4/9/08 and 7/1/09.

Anyone feel free to add any info I may have missed and.or your comments?

[JohnH]

I think I'd keep the response simpler.
I'd probably tell the realtor something along these lines:

"Your broker is vastly oversimplifying the situation and is likely to get lots of people in trouble by giving incomplete tax advice. The situation is much more complex and hinges on serveral critical factors which can be unique to each taxpayer. My recommendation is to strongly urge the prospective buyer to consult with a competent tax professional BEFORE making any sort of purchase commitment, and to plan to pay for that service. Beyond that, I do not have a comprehensive response I can provide in answer to your question."

[GRich0656]

The amount for the FTHB Credit was increased to the lower of $8k or 10% of the purchase price. The way I understand it, home must be purchased and occupied as principal residence by 11/30/2009. I don't know what the cut off date is for claiming this on an amended return for 2008.

[erchess]

Conflicted

I'm always conflicted when non clients ask tax questions. I don't want to appear ignorant or greedy but at the same time conveying tax information puts a tax professional at some risk especially if the communication is other than simply the spoken word. At the same time, I grew up in this business answering tax questions for the public at no charge as a way of generating the public perception that the firm was helpful and knowledgeable. That firm also gave away tax forms in my early years although they quit two or three years after they stopped ordering forms from a printer.

If the questioner wants one very simple fact I will usually give it even if that means looking it up in my Rapid Fact Finder. Anything that is not covered there I want a fee for the opinion unless the questioner has in the past paid me for services and even then I want a fee for a written or electronic opinion.

[Bees Knees]

TTB update on 3/6/2009 says:

http://www.thetaxbook.com/view_update.asp?1=128

Under the new rules, a home purchased in 2009 is still treated as a 2009 purchase even if the election is made to claim the credit on the 2008 return. Form 5405 has been revised to accommodate this new rule. If a home is purchased in the eligible 2009 period, the taxpayer can elect to claim the credit on the 2008 return by checking the box on line C, Part I, of Form 5405. Making the election to claim the credit on the 2008 return does not change the fact that the purchase is a 2009 purchase, subject to the new rules for homes purchased in 2009. Thus, the taxpayer can claim the higher $8,000 credit on the 2008 return, and not be subject to the recapture rules assuming the home is not sold within three years of the date of purchase. The election to report a 2009 purchase on the 2008 tax return can be made by filing an amended 2008 return.

According to the chart on that same update, the eligible 2009 period ends December 1, 2009.

This illustrates the importance of keeping up with the updates. Page 11-4 has been updated to include the above.