New Tax Credit Amounts To a Free Loan for $7,500  –  More details on the new temporary credit for some people buying homes between 4/9/08 and 6/30/09.  As always, this new credit doesn’t apply to the evil rich.

There’s also a new special website devoted just to this new credit.

One very interesting aspect to this new credit is that people have the option to claim it on their 2008 1040 for homes purchased between 1/1/09 and  6/30/09, as described on the FAQ page:

18.  If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?

Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

19.  For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?

Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.  

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 8/04/2008 11:15:00 AM Send this post: