First-Time Homebuyer Tax Credit: Deadline Extension
Under the Homebuyer Assistance and Improvement Act of 2010 (enacted on July 2, 2010), eligible homebuyers who entered into a binding purchase contract on or before April 30 to purchase a principal residence can now close on a home by September 30, 2010 in order to qualify for the First-Time Homebuyer Credit. Thus, under the new law the closing deadline for eligible homebuyers is extended from June 30, 2010 to September 30, 2010.
Here are some useful definitions and facts:
*First-Time Homebuyer: the homebuyer and his spouse (if he is married) must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
*Long-Time Resident Homebuyer: the settlement date must be after November 6, 2009 and the homebuyer and his spouse (if he is married) must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.
*Maximum Credit for a First-Time Homebuyer: $8,000.
*Maximum Credit for Long-Term Resident Homebuyer: $6,500.
*Claiming Credit – Method: must be done on paper return and using Form 5405, along with all required documentation, including a copy of the binding contract.
*Claiming Credit – 2010 qualifying purchase: If a 2009 return has not yet been filed, claim it on Form 1040 for tax-year 2009 (the returns must be printed out and sent to the IRS, along with all required documentation). If a 2009 tax return has already been filed, claim it on an amended return using Form 1040X. Whether or not a 2009 return has been filed, wait until next year and claim it on a 2010 Form 1040.