Kansas City Home Buyer Tax Credit - Is It As Simple As It Seems?

Buyer Tax Credit : Is It As Simple As It Seems?

The Home Buyer Tax Credit is not as simple or straightforward as clients might believe...Here are some nuances that will affect home buyers 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.
  

There is a "perfect storm" of sorts brewing in our industry, with the Treasury Department ceasing to purchase more mortgage-backed securities linked to the termination of the Home Buyer Tax Credit, we foresee higher interest rates along with a general tightening of the "credit noose"...Transalation, it's gonna get harder to get a new mortgage after May 1.

Source: Bankrate.com, Marcie Geffner (01/21/2010)

Submitted by Martin Taggart, Blogger, Kansas City Real Estate Junky
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