First Time Home Buyer Tax Credit Extension

Extended $8,000 Credit for House Purchases – New Tax Break Deadline?

Nov 1, 2009

A first time home buyer tax credit extension may be in the works. Tax break for U.S. house purchases may not expire November 30, 2009. Heed tax credit rules in Form 5405.

Prospective home buyers in the United States have known since early 2009 that they had until November 30, 2009 to close on a home in a qualifying purchase if they wished to claim a first time home buyer tax credit of $8,000.

Extended $8000 Tax Credit

As the final countdown to November 30, 2009 nears, home buyers may get a renewed chance at the $8,000 tax credit. In October 2009, CNBC reported that Congress may extend the tax credit until some time in 2010, as part of a broader measure related to unemployment.

First Time Home Buyer Tax Credit Extension for Americans

What would a tax credit extension mean for Americans? Those who didn’t act within the original timeframe due to money constraints would have a little longer to pull together funds. Those who didn’t act because they believed they wouldn’t be able to close before December 1st would also get a second chance due to an extended deadline.

$8000 Home Purchase Tax Credit Extension Until 2010?

How will Americans know if an extension has actually passed? To verify the existence of a home purchase tax credit extension, Americans can review the actual legislation once it is posted on the Library of Congress website, thomas.loc.gov. The IRS would also certainly issue guidance, most likely in the form of a press release, a notice on irs.gov, and any required updates to Form 5405, assuming the same tax form should be used.

1st Time Homebuyer Tax Rebate Fraud – See $8000 Tax Credit Rules on IRS Form 5405

Although the first time home buyer tax credit is a legitimately good deal for thousands of Americans, some people are trying to take advantage of this tax incentive. In a July 29, 2009 press release (IR-2009-69), the Chief of the IRS Criminal Investigation unit, Eileen Mayer, noted that the IRS will “…vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction. The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Although unscrupulous tax preparers or advisors may be prosecuted for trying to defraud the IRS, individuals should also take special care to know all relevant tax credit guidelines before trying to claim the $8,000 first time home buyer tax credit. The IRS clearly indicates who can and cannot claim the tax credit in the instructions to IRS Form 5405. Anyone who does not conform to the tax credit rules, yet decides to apply for the $8,000 tax break, is subject to prosecution.

Tax Break for U.S. House Purchases – Can You Qualify?

Qualifying homes cannot be purchased from certain close relatives like children, grandchildren, or parents. Qualifying homes must also be located inside the United States, and taxpayers above certain income thresholds are not eligible for the $8,000 home purchase tax credit.

Democrats Agree to Extend Home-Buyer Tax Credit: Dodd. Retrieved from cnbc.com on October 28, 2009.

IRS Warns Taxpayers to Beware of First-Time Homebuyer Credit Fraud (IR-2009-69). Retrieved from irs.gov on July 30, 2009.

The copyright of the article First Time Home Buyer Tax Credit Extension in Personal Tax Planning is owned by Lena Gott. Permission to republish First Time Home Buyer Tax Credit Extension in print or online must be granted by the author in writing.