Can Someone Explain This Statement?

[ddoshan]

First time homebuyer who can claim the credit?

Purchase home after April 30,2010 and before October 1st 2010 and you entered into a binding contract before May 1 2010 to purchase the home before July 1, 2010.

I have read this statement several times but can't seem to get the meaning. Bottom line is, if you purchased the home on Jul 4th 2010 but did not have a binding contract before May 1, 2010 ... you are out of luck ... correct. But if you had signed a purchase agreement on April 29, 2010 but did not actually close until say August of 2010... you would still be out of luck unless the purchase agreement indicated that the closing would take place before July 1,2010.

We are looking back at a 2010 return. As you can probably tell I am having a little trouble understanding just what the criteria is or was. Anyone simplify?

Why or how did this before Oct 1, 2010 come about? I can't recall.

[Lion]

My tired memory

I didn't have any buyers so don't have this firmly in my memory, but wasn't the date by which the buyer had to close extended due to the backlog at mortgage companies? Date by which the buyer had to contract remained as originally enacted. Do you have your 2010 TTB with updates handy?

[Jesse]

wasn't the date by which the buyer had to close extended due to the backlog at mortgage companies?

Lion nailed it, that is why only the closing date for a binding contract was extended.

[taxea]

Purchased dates are those during which you committed to buying the house. Binding date is the date you sign the mortgage and note and are handed the keys. The extension was created because several purchasers would not have cleared escrow and signed the mortgage until after the end of the purchasing dates. It was meant to allow them the time to take possession of the residence.

[Jesse]

I think the purchase date is the date you actually settle, close, and pay for the house. The binding contract date is the date you sign a contract, such as the offer to purchase, showing intent by buyer, and acceptance from seller to purchase the home at a later date. Sometimes there is contingencies in the offer to purchase and if the deal fell thru and the home was not purchased on or before 09/30/10 you were out of luck.

I don't think you will get the keys before you purchase the home, but maybe I'm misunderstanding the entire contract/purchase theory.

[taxea]

maybe you are

[okie1tax]

Fthbc

http://www.irs.gov/pub/irs-pdf/p4819.pdf