Want $8,000 Cash?

It has been a while since I have last posted! I just came back from Dallas, TX for a family wedding. The home prices there are actually pretty comparable to Indiana, in fact you may be able to get a little more bang for your buck there. The down sides to Texas housing- there are no basements (where do we put all of our junk?) and the property taxes are pretty steep (they have no state income tax, but still it's a little high).



Speaking of taxes, you have probably heard a lot about this $8,000 first time homebuyers tax credit from the economic stimulus package. Here is a quick Q&A that should hopefully clarify some things:


Q: Who is Eligible to Receive the $8,000 Tax Credit?
A: First-Time home buyers purchasing any type of primary owneroccupied
home. The home must be purchased between January 1, 2009
and December 1, 2009.


Q: What is a Tax Credit?
A: A tax credit is a dollar-for-dollar reduction in what the taxpayer owes.
For instance, if a tax payer is due to receive a $500 refund, that refund
would be increased to $8,500! If a taxpayer owes $8,000, with the
credit that taxpayer would only be responsible for $0!


Q: What is the Definition of First Time Homebuyer?
A: A “First Time Homebuyer” is anyone who has not owned a principle
residence in the past 3 years. For a married couple, both spouses must
meet this criteria in order to qualify.


Q: What Type of Home Qualifies?
A: Any Home Purchased by First Time Home Buyer - Old or Existing -
Single Family, Condo, Townhomes.


Q: Is the $8,000 credit for homes of all purchase prices?
A: No, the tax credit is equal to $8,000 or 10% of the purchase price,
whichever if lower. Ex. A purchase of $55,000 would result in a tax
credit of $5,500


Q: Are there Income Limitation?
A: Yes, a First Time Homebuyer’s “Modified Adjusted Gross Income”
(MAGI) can not exceed $75,000. For a purchasing couple
the combined MAGI cannot exceed $150,000.


Q: What is “Modified Adjusted Gross Income (MAGI)?
A: MAGI is determined by adding any foreign income, student loan
deductions, IRA contributions deductions and deductions for
higher education to your annual adjusted gross income. Contact
your CPA, Tax Preparer or Attorney with questions.

Q: Do I Have to Pay Back the Money?
A: No!!! The Tax Credit does not have to be paid back as long as
you live in the home as your primary residence for 3 years. The
credit is owed back if the property is sold within the initial 3
years after purchasing.

Q: What does “refundable” mean in terms of the tax credit?
A: “Refundable” means that a home buyer can receive the credit
even with little or no federal income liability to offset the credit.

Q: What paperwork is required prior to or at Closing?
A: None. The paperwork required to receive the credit will be completed
in relationship to the home buyers annual tax files by the
taxpayer or their tax preparer.

Also, if you think you qualify for this tax credit and would like a copy of the tax form, feel free to email me at rebecca.upton@century21.com and I will send you a copy. Feel free to email with any questions on this credit too!