Part 3 Debunking the tax credit Myths

by August 12, 2009 • 0 comments

You know how you receive those lovely thick pieces of hard to open Junk mail that say in bold big letter, “TIME SENSITIVE ” well this is your online version of that but it really is TIME SENSITIVE, so in an attempt to wrap this topic, up here we go.

Tax Credits are a wonderful way for saving money on that dreaded tax bill but there is still much misinformation out there. This will be my third and final attempt to seperate the fact and fiction surrounding the tax credit for New home buyers. We have addressed some of the other questions in prior articles but there are a few myths that remain. . . So we will try to stick to “just the facts Ma’am”

Myth #1 To qualify it has to be a house.
NO, a home is different for everyone and the only definition that need apply for a home is a residence. With that in mind then you may purchase a detached single family, a duplex, townhome, condominium, pre-manufactured home (mobile home) and even a house boat!!! The only restriction that the program requires is that you are not able to buy a home from your parents, children,grandchildren or spouse. In other words it must be an “Arms length transaction”

Myth #2 I have to fill out loads of paper work before I even purchase my home.
There is no paperwork to file ahead of time to receive the credit. You just need to fill out the IRS tax form 5404 when filing your income tax return. Then, follow the instructions on the tax forms. Again, as in all things, discuss your personal situation with your lender and he will guide you through the process.

Myth #3 I have to buy an existing home.
NO absolutely NOT. This one is timely right now however and if a home is not already started you may be pushing the envelope a bit. Remember you must close on or before November 30, 2009. You are allowed to apply the tax credit for an existing home or a newly constructed home. If you own a lot and construct your home yourself, or with a builder, your date of ownership is considered to be the date you first occupy the home. For homes that are built by a developer/home builder, eligibility is determined by the settlement date. I have one couple doing this but the home was already started so borrowing any acts of Nature then they should be just fine.

Myth #4 I must be a US citizen to utilize this program.
An alien resident who has not owned a home in the past 3 years, and is within the income limits, may also claim the tax credit if he meets all other requirements.

For space and time and my writing skills we can not address every issue that comes up but his should get you started. Please discuss this with your Realtor, banker and accountant to see what best fits you. Hopefully if you are looking forward to the credit to help buy your home you have already started the journey and if not what are you waiting on???? Get on your boogey horse and GOOOOOO.

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