April 13th, 2010 12:58 PM by Lehel S.
HOMEBUYER TAX CREDIT
Amount of Tax Credit
10% of purchase price not to exceed $8,000 for first-time homebuyers or $6,500 for long-term residents.
5% of purchase price, not to exceed $10,000 for first-time homebuyers or buyers of properties that have never been occupied. (See also Maximum Credit for All Taxpayers.)
Yes. Property purchased must be the taxpayer’s principal residence which is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121).
Yes. Property purchased must be a qualified principal residence and eligible for the homeowner’s exemption from property taxes (Cal. Tax & Rev. Code § 218).
Type of Property
House, condominium, townhome, manufactured home, apartment cooperative, houseboat, housetrailer, or other type of property located in the U.S.
Single-family residence, whether detached or attached, condominium, co-op, manufactured home, mobilehome, or house boat. A home constructed by the taxpayer is not eligible because the home has not been "purchased".
Yes. Tax credit begins to phase out for modified adjusted gross income (MAGI) over $125,000 (or $225,000 for joint filers). No tax credit at all for MAGI over $145,000 (or $245,000 for joint filers).
Yes. Any amount of the tax credit not used to reduce the tax owed may be added to the taxpayer’s tax refund check.
No repayment required if the buyer owns and occupies the property for at least 36 months after purchase.
No repayment required if the buyer owns and occupies the property for at least two years immediately following the purchase.
Multiple Buyers(not married to each other)
Tax credit may be allocated between eligible taxpayers in any reasonable manner. See IRS Notice 2009-12 at www.irs.gov/pub/irs-drop/n-09-12.pdf.
Tax credit must be allocated between eligible taxpayers based on their percentage of ownership.
Maximum Credit for All Taxpayers
$100 million for first-time homebuyers and $100 million for never-occupied properties, both on a first-come-first-served basis.
When to Claim
Full tax credit may be claimed on 2009 or 2010 tax returns.
1/3 of total tax credit may be claimed each year for 3 successive years (e.g. $3,333 for 2010, $3,333 for 2011, and $3,333 for 2012).
Internal Revenue Service (IRS).
Franchise Tax Board (FTB).
How to File
First-Time Homebuyer Credit and Repayment of the Credit (IRS Form 5405) to be filed with tax returns
Submit application to the FTB to obtain Certificate of Allocation. The FTB may prescribe additional rules and procedures to carry out this law.
Cannot be an acquisition from related persons as defined; cannot be an acquisition by gift or inheritance; and buyer cannot be a non resident alien.
Cannot be an acquisition from related persons as defined; buyer or spouse must be 18 years old; buyer cannot be another taxpayer’s dependent; credit is allowed for only one qualified principal residence; credit is disallowed if taxpayer received 2009 new home tax credit; and credit allowed cannot be a business credit under Cal. Tax & Rev. Code § 17039.2.
26 U.S.C. section 36.
Cal. Rev. & Tax Code section 17059.1 (as added by Assembly Bill 183).
Date of Enactment
November 6, 2009 (as revised).
March 25, 2010.
IRS Web site at http://www.irs.gov/newsroom/article/0,,id=204671,00.html.