There are just over two months left to take advantage of the first time home buyers tax credit signed into law earlier this year. The credit is worth $8,000 to home buyers buying a house before the November 30, 2009 deadline. It is important to note that the IRS requires a closing prior to November 30 to be eligible for the credit. So, while the deadline is two months away, if you are not already in the process of buying a house, you may already be running out of time.
The definition of a home can include a house, townhouse, condo, RV, etc. It just has to be a primary residence. Second homes, investment property or vacation homes do not qualify. "First time buyer" is a bit of a misnomer as the only requirement for qualifying as a first time buyer is that you have not owned a primary residence in the last three years. So, if you have owned a house in the past, but have been renting an apartment for the last three years, you would still qualify as a first time buyer.
There are several ways to claim the credit. The law allows you to claim the credit in 2008 if you want, which means you can ammend your 2008 return claiming the credit and receiving a refund immediately (well, as immediately as the IRS processes your return and refund), you can claim the credit on your 2009 return, or, if you have FHA financing you can take the credit directly against closing costs at closing.
Hope that helps make the credit a little more understandable. If you have questions or I can help you claim the credit, feel free to e-mail me at James(at)RainwaterCPA.com
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