The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it.
- To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
- Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
- Buyers who claim the credit in 2009 can’t file electronically because the Internal Revenue Service hasn’t put the required forms on line. The wait for a refund is three or four months.
- The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn’t qualify.
- The home can’t be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
- A buyer who earns no taxable income or doesn’t owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.
Source: Bankrate.com, Marcie Geffner (01/21/2010)