New Home Credit- more info

I just received this nice outline of the New Home Credit from Jennings Seminars, who is one of the many tax training seminars that we will attend in 2009.

It was so concisely put together, I thought you might enjoy it.

Sincerely, Deborah Sherwood, EA

New Home Credit

The IRS has recently issued several new pieces of guidance about the home credit.

Changes from the President's Bill of 11/6/2009:

1. Purchase date extended to having a binding contract in place by 4/30/2010, closing it by 6/30/2010.

2. The above dates are extended 1 year for members of the military.

3. Discontinued personal residence use of a home for which the credit was taken within 36 months of purchase requires repayment except in the event of a military move.

4. Yes, homes include trailers, RV's, boats and structures.

5. The new AGI phase-out limits ONLY apply to homes purchased after 11/6/2009.

6. All returns now require a copy of the settlement statement.

7. Homes purchased after 11/6/2009 require the new Form 5405-which has not yet been released as of 11/28/2009! This includes amended returns. See IRS IR-2009-108.

8. Homes purchased from in-laws after 11/6/2009 no longer qualify for the credit.

9. Homes purchased by minors and dependents after 11/6/2009 no longer qualify.

10. No provision has been made, or will be made, to forgive the $7,500 interest free loan credit available for 2008 purchases. And yes, it is fair! 99% of Americans would have loved to receive a $7,500 interest free 17 year loan, but they paid for their home without it.

11. Homes purchased after 11/6/2009 costing over $800,000 do not qualify for any credit.

12. A home owned and used continuously as a personal residence for 5 of the last 8 years also qualifies as a new home, with all applicable 1st home rules. However the credit is limited to $6,500.

13. It is theoretically possible to get the clunker credit, lean burn diesel credit, sales tax deduction and new home credit on a new RV!

New IRS Info sheet 2009-0135 also states that where a married couple both owned a home, divorced and one was forced to move out, neither qualifies for the 1st home credit even though one had lived in a different residence for over 3 years.

New IRS info sheet 2009-0167 states that where a duplex is purchased for rental as well as personal residence use, only the purchase price attributable to personal residence use qualifies for the credit.