1/1/2010 is fast approaching. First-time home buyers are eligible for the tax credit. To qualify for the tax credit, a contract for the home purchase must occur on or after January 1, 2009 and on or before April 30, 2010 and close on or before June 30, 2010. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. There are limitations and restrictions, so check out the facts and CLICK HERE.
To get your tax credit, you cannot file electronically. You should attach a copy of Form HUD-1 (Settlement Statement) to your return. Also, before filing, it would be a good idea to submit Form 8822 to the IRS to show that you now reside in the new home. Because there have been a rash of fraudulent claims for this credit, the IRS is getting tough and may ask for a lot of additional information if there are any discrepancies with the return. Although it is not necessarily routine, the IRS may require:
- A copy of the buyer’s driver’s license
- A copy of their latest pay stub
- A copy of their bank statement
- A copy of the receipt for latest mortgage payment
- A utility bill showing proof of ownership
It is recommend that you attach as much evidence as possible to the return to head off further demands for proof by the IRS.
NOTE: If you don’t qualify for the first-time homebuyer credit, you MAY qualify for a $ 6,500 credit. There are several qualifications that must be met for this $ 6,500 credit. Call me for details (916) 224-7653.
As always, contact a qualified tax professional to get expert advice.