Extension of First Time Homebuyer Tax Credit

Included in a bill to extend unemployment benefits to many Americans is an extension of the First Time Homebuyer Tax Credit.  The credit is currently slated to expire on November 30, 2009.

As would be expected, Congress continues to tinker with tax law provisions like this credit.  The proposed credit would not longer be limited to first time buyers who may be able to claim an $8,000 credit, but would be expanded to people who have owned a home for at least five of the last eight years.  Those individuals could get up to a $6,500 credit on the purchase of a new residence.  I suspect the name of the credit will need to be changed to the "First, Second, Third and possibly Fourth Time Homebuyer Tax Credit".

Annual income limits (before the credit begins to phase out) to claim the credit are proposed to increase to $125,000 for individuals and $225,000 for married couples.

To qualify purchase contracts would need to signed before April 30, 2010 and closing would need to occur before June 30, 2010.  The proposal also limits the cost of the new home to $800,000.  That's a lot of house...

Any tax advice contained in the body of this blog was not intended or written to be used and cannot be used, by the reader for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.