Congress finally approved an extension of the first-time and move-up buyer tax credits ($8000.00 and $6500.00 respectively) to September 30, 2010. This only applies to those who already signed a contract by April 30, 2010.
I have very few clients who will be affected by this.
I guess it’s good to help out those unfortunate souls who got sucked down some mortgage underwriting vortex and ended up with delayed closings.
I will so miss the tax credit. I loved the credit with all my heart. It was an awesome, effective stimulus to a dead real estate market. The problem is how do we live without it?
There is a blitz of closings this month as the $8000/$6500 tax credits wind down.
Here are the forms needed to amend your 2009 tax return to claim the credit. Be sure to use the updated 5405 form. A sharp client pointed out that form 1040x was amended recently too.
All revised 2010 forms for tax credit
We have been waiting for the new Form 5405 from IRS to claim the $8000 first-time buyer tax credit and the $6500 move-up buyer tax credit. The form was just issued on January 15, 2010. Click here to get the form and instructions. This form must be used for all closings after November 6, 2009.
For closings after November 7, 2009, a new form 5405 is required to file for the $8000 first-time buyer tax credit and the $6500 move-up buyer tax credit as I discussed here.
Please don’t use the 2008 Form 5405 for closings after November, 7, 2009, because your tax refund will not be processed.
The IRS website is saying that the new form will be issued by January 8, 2010, so it won’t be too much longer.
It’s great that the$6500 move up buyer tax credit was added and that the $8000 first-time buyer credit was extended. But, IRS is advising buyers to wait until the end of December to file for the tax credit until it issues a new form 5405 that reflects the new changes.
Real estate writer Ken Harney (a consistently excellent writer) says that if you file for the credit using the “old” form 5405 (which is still on the IRS website), it is likely that the tax rebate will linger or not be processed at all.
So anyone who bought after November 6 of this year should wait until later this month for the new form 5405 before amending their 2008 taxes.
The House and Senate have passed an extension of the $8000 first-time buyer tax credit and added a $6500 tax credit for move-up buyers. The Senate is expected to also sign it shortly and President Obama will sign it today signed it on November 6.
This was absolutely necessary because the housing market was slowing down already, due to the planned November 30 expiration of the credit. Here are some answers to questions on the new version of the tax credit. More here.
The text of the HB 3548 can be found by clicking in the box above. (It’s pretty tortured language…).
The $6500 tax credit for move-up buyers starts for closings after 11/6/09. Oddly enough, blogs and websites differed on when the move-up buyer credit started. Some said it started on 11/6/09 and some claimed it started 12/1/09. This has already been in issue in several closings I am handling. It is not clear that the move-up buyer credit started 11/6/09.
Both first-time buyers and move-up buyers can claim the credit by amending their 08 return or they can claim it on their 09 tax return.