First-Time Homebuyer Credit

I am happy to report that Congress has passed a bill extending the Homebuyer Tax Credit closing deadline to September 30, 2010. This is a huge win for REALTORS® and homebuyers,

The extension applies only to transactions that had ratified contracts in place as of April 30, 2010, and have not yet closed. There will be no gap between June 30 and the date the President signs the bill into law.

For Qualifying Purchases in 2010

For qualifying purchases in 2010, you have the option of claiming the credit on either your 2009 or 2010 return.

Deadlines:

You must have bought — or entered into a binding contract to buy — a principal residence on or before April 30, 2010.
If you entered into a binding contract by April 30, 2010, you must close (go to settlement) on the home on or before Sept. 30, 2010(recent legislation extended the June 30 deadline previously in effect).

The new law also:

Authorizes the credit for long-time homeowners buying a new principal residence.
Raises the income limitations for homeowners claiming the credit. The credit would be available to individuals earning up to $125,000, or $250,000 for couples.
Applies only to homes used as a taxpayer’s principal residence.
Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

Bottom line:

This means that unless you are already in contract with your move, you will not quality for the tax credits. The new legislation is set to be signed by the president of the United States, on Friday morning. The idea of the legislation is to boost home sales and to help to further recover the economy in the U.S.

Sabrina Solesbee, SolesbeeGroup.com

www.YorbaLindaLiving.com