MOVE-UP/REPEAT HOME BUYER
TAX CREDIT
Valley Community Development Corporation January 2010
| FIND
OUT IF YOU QUALIFY FOR THE $6,500 MOVE-UP/REPEAT TAX CREDIT FOR HOME
BUYERS To learn about the $8,000 Tax Credit for First Time Home Buyers Click Here! |
President Obama's Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing homeowners) |
| INCOME
LIMITS FOR THE TAX CREDIT: The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. Partial credits of less than $6,500 are available for some taxpayers whose MAGI exceed the phaseout limits. WHAT IS MODIFIED ADJUSTED GROSS INCOME (MAGI): MAGI is determined by the IRS. You will need to know your ADJUSTED GROSS INCOME (AGI) to find your MAGI. AGI is total income for one year minus certain deductions. MAGI can be determined by adding to the AGI certain amounts such as foreign income, student loan deductions and other amounts. VALLEY COMMUNITY DEVELOPMENT CORPORATION IS HERE TO HELP! |
Q: Who is elgible
to claim the move-up/repeat tax credit? A: Move-up or Repeat Home Buyers purchasing any kind of home (new or resale) are elgible for the tax credit. Buyers are ineligible for the tax credit if they buy their home from a close relative, including a spouse, parent, grandparent, child or grandchild. The home must also be used as the buyer'sprincipal residence. Q: What is the definition of a move-up or repeat home buyer? A: The law defines a move-up or repeat home buyer as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit. Q: How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? How is this different than the rules established in early 2009? A: The previous tax credits applied only to first time home buyers and were for different amounts of money. Q: How is the amount of the tax credit determined? A: The tax credit is equal to 10% of the home's purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit. Q: What types of homes will qualify for the tax credit? A: Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also know as mobile homes) and houseboats. Q: How do I claim the tax credit? Do I need to fill out an application? Are there documentation requirements? A: You claim the tax credit on your federal income tax return. Specifically, home buyers should complete the IRS form 5405 to determine their tax credit amount, and then claim this amount on Line 67 of the 1040 income tax form for 2009 returns (Line 69 of the 1040 income tax form for 2008 returns). Q: Do I have to repay the money I receive from the tax credit? A: No, this is a tax credit and does not need to be repaid to the IRS. FOR MORE INFORMATION GO TO : http://www.federalhousingtaxcredit.com/faq2.php www.fairmark.com www.irs.gov |
© 2008 Valley Community Development Corporation
Equal Housing Opportunity