Homebuyer tax credit updates

OK, so by now a lot of people have heard about the Homebuyer Tax Credit, but there is still so much confusion. I can't count the number of people who have said, "Yeah, I've heard of it, but it isn't really getting money, it is just a reduction in taxes if you are going to owe taxes, right?" WRONG! This is real money. If you were going to get $1,000 back on your taxes and you purchased a qualifying property, you would get $9,000 back instead.

Of course, there are a number of things to consider and you should talk to your qualified Realtor and a CPA before jumping in, but this is a tremendous opportunity and it won't last forever. If fact, you must have a property under contract by April 30th, 2010 and it must close by June 30th, 2010 in order to get the credit.

**This is a partial list and should not be used as a complete guide! This can get “messy” when dealing with documentation so be sure to visit with your Certified Public Accountant!!
Here is a brief list of other things to consider when thinking about taking advantage of this opportunity:
1. The credit is $8,000 OR 10% of the purchase price, whichever is less for a first-time homebuyer. The credit is also available for current homeowners (see note below) and is $6,500 or 10% of the purchase price, whichever is less.
2. Current homeowners can purchase a new home and receive a credit by applying for the Long-Time Resident Credit. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. To avoid delays, proper documentation needs to be attached to the tax return.
3. TAX SEASON NOTE: The documentation requirements mean that taxpayers claiming the homebuyer credit cannot file electronically and must file paper returns! Also, you can file your taxes, close on your property and then file an amendment for your 2009 taxes to receive the credit prior to filing 2010 taxes after the 1st of 2011. Because some people (who are these people!!) are filing fraudulent claims, the IRS has a lot of work to do in verifying the claim is real and the credit is taking six to nine months to get processed!
4. The credit does NOT need to be repaid UNLESS the home is sold or turned into a rental within 36 months of purchase.

Well, that is some of the information about the tax credit. On one hand, it is pretty straightforward; the money is there for the taking as part of the stimulus. On the other hand, there are some “i’s” to dot and “t’s” to cross so navigate carefully. We’re happy at Trails West to answer some basic questions. You can also visit our website at www.trailswestrealestate.com and look at a chart we’ve made available under the Buyer Tab that helps answer some of your basic questions. Call or visit us at the following locations:
Bigfork: 420 Electric Avenue (Downtown) or 301 Eagle Bend Drive (Eagle Bend) (406)837-7050
Lakeside: Hwy 93 and Bills Road (406)844-6050
Whitefish: 1399 Wisconsin Avenue (moving soon to 148 Central Avenue Downtown) and our Lake office inside the Lodge at Whitefish Lake. (406) 862-4900