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Basic Information on the Federal Homebuyer Tax Credit



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By : Paul Escobedo    99 or more times read
With April coming to an end soon, so follows the expected expiration of the Homebuyer Tax Credit offered by the federal government for first-time homebuyers and existing homeowners. The last iteration of the tax credit was set to expire on November 30, 2009. On November 6, 2009 the tax credit was extended and expanded through spring of 2010. Presently, the tax credit is available for first-time homebuyers and existing homeowners who sign the purchase contract on a primary residence by April 30, 2010 with the closing completed by June 30, 2010.

For in depth information on the federal tax credit for homeowners view the site at IRS.gov. As far as basic information goes, the federal government is offering a tax credit for first-time homebuyers and existing homeowners who enter into a binding contract to purchase a new home by April 30, 2010 with the closing completed by June 30, 2010.

A first-time homebuyer is defined as a buyer who has not owned a home during the last three years up to the date of the purchase of the residence. First-time homebuyers are able to claim a tax credit for 10% of the purchase price of a home up to a maximum of $8,000. The home purchased cannot exceed the $800,000 price cap. The full credit will be available if taxpayer has a modified adjusted gross income up to $125,000 if filing as single and up to $225,000 if filing jointly. A partial credit will still be available if a single filers MAGI exceeds the $125,000 as long as it stays between $125,000.01 and $145,000. Joint filers can receive a partial credit if their MAGI are between $225,000.01 and $245,000.

An existing homeowner is defined as someone who has lived in a home for a period of 5 consecutive years out of an 8 year period ending on the purchase date of the home. Existing homeowners purchasing a new primary residence may claim 10% of the purchase price of the residence up to a maximum of $6,500. The home purchased must not exceed the $800,000 price cap. As with the first-time buyer credit, the full credit will be available for existing homeowners if the taxpayer has a modified adjusted gross income up to $125,000 if filing as single and up to $225,000 if filing jointly. A partial credit will still be available if a single filers MAGI exceeds the $125,000 as long as it stays between $125,000.01 and $145,000. Joint filers can receive a partial credit if their MAGI are between $225,000.01 and $245,000.
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