Your search results

Do you have questions about the Tax Credits?

Posted by kim carpenter on November 10, 2009

| 0

If you are like me, you probably have some questions about the extended $8000 first time buyer tax credit and the addition of the $6500 tax credit for existing home owners. Hopefully the following will answer some of your questions. If not, feel free to send me your question and I will get you an answer.

Q: I owned a home for 20 years, but due to divorce became a renter in 2008, would I qualify for the $6,500 credit for current home owners?

A: Yes, so long as all of the other qualifications are met. The new credit requires buyers claiming this credit to have owned a home they maintained as their primary residence for 5 consecutive years out of the last 8.

Q: Our income level exceeds the limit in the previous credit, but we would qualify under the new limits. Should we wait until after November 30 to close or do we qualify now?

A: No need to wait. The new income limit ($125,000 for individuals and $225,000 for married couples) are effective after November 7, 2009. The new credit makes the date November 30, 2009 completely irrelevant.

Q: If my income exceeds the income limits, is it possible for me to still be eligible for a smaller credit?

A: It’s possible. Like in the previous credit, a $20,000 phase out is provided with the new limits. For example an individual making $140,000 exceeds the new income limit by $15,000. Because $15,000 uses up ¾ (0.75) of that $20,000 phase out, that buyer could qualify for the other 25% of the credit, or $2,000 for a first time buyer or $1,625 for a current home owner. The phase out is $20,000 for both individuals and married couples.

Q: Are the income limits different for the first-time home buyer credit versus the current home buyer credit?

A: No, the limits are the same.

Q: I have a closing scheduled for November 30, 2009 to meet the deadline of the original tax credit. Do I need to move the closing to December 1, 2009?

A: No. That Nov. 30 date became meaningless when the President signed the bill becoming effective on Nov. 7, 2009. Besides the new deadline of April 30, 2010 (and closing by June 30), the only date you should worry about is Nov. 7, 2009. That is the date the modifications to the first-time home buyer credit and the new current homeowner credit became effective. Sales prior to that date are subject to the rules of the previous credits, sales on and after Nov. 7, 2009 are subject to the new rules.

Q: I heard there was something included in the new credit to crack down on fraudulent claims, how will that affect me?

A: It requires you to submit a HUD-1 settlement form (closing statement) with your taxes when you claim the credit.

Q: Is there any sort of phase out for the limit on home purchase price in the new credit?

A: No. The phase out is only for income limits. The $800,000 cap on purchase price is firm. Any purchase with a price of more than $800,000 is ineligible.

In addition to the tax credits, there are many unique financing programs. If are interested in learning more about any of these unique programs, please contact myself, Kim Carpenter at 317-509-4000 or sold@kimsellsindy.com

or contact Cori Drudge at 317-439-4495 or cdrudge@stonegatemtg.com

We at the Marchant Team strive to always be ahead of the curve and provide you with the most innovative tools to assist you with your real estate needs! Whether searching the Geist/Indianapolis area, Fishers area, Carmel area or Noblesville area, we have you covered. Some of the services we offer are “One Call Get’s it All” and “Smarter Agent“, feel free to give them a try, they will make your homebuying process a lot less stressful. Just call, e-mail or text me to get set up!!!