EXPANDED TAX CREDIT...LET'S KEEP MOVING FORWARD!

Thank you, President Obama!

The President recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30 and it now includes a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.

Some examples per RISMEDIA, November 9, 2009:

Example 1:Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

Some additional restrictions/guidelines:

The tax credit only applies to homes less than $800,000
Purchase deadline is May 1, 2010
Transaction must close BEFORE July 1, 2010
Income limitation is now 125K (was 75K)
Married income limitation is 225K (was 150K)
Credit will be issued as a check once a specific form is submitted to the IRS after the purchase is complete

RISMEDIA further cites "many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit."

Examples:

-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).

-The credit applies even if you have co-signers on your mortgage loan

Read more: http://rismedia.com/2009-11-08/expanded-version-of-tax-credit-will-allow-more-homebuyers-to-qualify/#ixzz0WRTpqOOt