David Knoble, CPA, PLLC

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First Time Homebuyers Tax Credit Nuances

The gov­ern­ment gave us a tax credit in 2008 for pur­chas­ing a new home and then came 2009.  The cur­rent year’s tax credit makes the 2008 ver­sion look like a rip-off.  This year first time buy­ers get a credit of up to $8,000 from the pur­chase of a home.  There are still some lesser known facts about the credit.

The IRS allows home­buy­ers to pur­chase a home under this tax credit even if they use a sub­si­diezed mort­gage.  The 2008 tax credit did not allow these buy­ers to qual­ify, so this is a note­wor­thy change.  Know that these home­buy­ers may have a recap­ture if they sell the home in the next 9 years.  Even still, this opens the doors to many more individuals.

How about hav­ing your par­ents co-sign for your mort­gage?  Many first time home­buy­ers have par­ents that are will­ing to co-sign the mort­gage.  If the par­ents own a home, will the home­buyer still qual­ify for the tax credit?  The IRS says ‘yes’!

Any­one con­sid­er­ing the pur­chase of a first time home should do this now.  The home must be pur­chased prior to Decem­ber 1, 2009.

© 2009, david.knoble
by David Kno­ble, CPA, PLLC
Serv­ing Non-Profits, Busi­nesses & Indi­vid­u­als
Rock Hill, SC

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