• The home must be purchased by April 30, 2010. Under the act binding contracts       signed by April 30, 2010 have until  June 30, 2010 close.
• Only home purchases in the United States are eligible for the homebuyer credit.
• First-time homebuyers are defined as individuals who have not owned a home - either separately or jointly with someone else in the past three years.
• Long-term resident homebuyers are defined as individuals who have lived in the same address for five consecutive years of an eight year period.
• The credit is 10% of the home's purchase price with a maximum of an $8,000 tax credit for first-time homebuyers and a $6,500 tax credit for long-time resident homebuyers.
• Because of paperwork requirements, individuals claiming the credit can not file their tax return electronically. A paper return must be mailed.
• The credit may be claimed using IRS Form 5405. Homebuyers must attach a copy of a properly executed settlement statement or certificate of occupancy. For homebuyers purchasing a mobile home, the retail sales contract may be submitted.
• Long-term resident homebuyers should also include documentation to demonstrate that they lived in the residence for a five year period. The documentation could include Forms 1098, mortgage statements, property tax records or copies of homeowners insurance.

There are special rules for Members of the Military, the Foreign Service and the Intelligence Community.

Exemption From Tax Credit Recapture Rules

• Typically, homes that are sold or that cease to be used as a principal residence within three years of the initial purchase as subject to recapture of the tax credit.
• However, qualified service members who sell or move to official extended duty are exempt from the recapture rule.

Extension of Tax Credit Deadlines

• The homebuyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.
• However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these homebuyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.

Definitions

• "Qualified service member" means a member of the uniformed services of the U.S. military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.
• "Official extended duty" means any period of extended duty outside the United States for at least 90 days during the period beginning after December 31, 2008 and ending May 1, 2010.

I will be happy to answer any questions you may have.

Alan Gross
Home Office: 240.813.0614
Email: HomeMortgageAdvisor@gmail.com
Web: www.mtg-info.net