Elisha Gutloff\’s Blog

Tax credit offered to new homebuyers Expires June 30, 2009!  

1. Who is eligible?
   • First-time homebuyers or any homebuyers who have not owned a principal residence in the last three years
2. How does it work?
   • Eligible purchasers can claim the $7,500 credit on their annual tax return form.

·                 Amount of credit: 10% of cost of home or a maximum of $7,500

1. Repayment:
   • Two years after the credit is claimed, the homebuyer will have to start paying it back.
   • 15 equal annual installments will have to be paid back to the IRS every year.

·                 6.67% of the borrowed amount or a maximum of $502

1.  
   • If home is sold before 15 years, the remainder of the loan will have to be repaid to the IRS upon the sale.

·                 Part of the liability can be forgiven if the gain on the sale is less than the amount of the loan.

1. Restrictions:
   • Home purchase time limit:

·                 Homes purchased on or after April 9, 2008 and before July 1, 2009

1.  
   • Home must be a single family residence (including condos, coops) that will be used as a principal residence.
   • Home must be located in the United States.
   • Home cannot be financed through mortgage revenue bonds.
   • Income restriction:

·                 To qualify for full $7,500 credit, the taxpayer must make no more than

a.             $75,000 for single returns

b.           $150,000 for joint returns ·                

To still qualify for credit but at a lesser amount, the following income caps apply

a.             $95,000 for single returns

b.           $170,000 for joint returns  

For more information on the tax credit call:

Elisha Gutloff

919-672-2394

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