First time home buyers tax credit

There's so much information and mis-information going around about the first time buyer's house tax credit, that I thought I would list the facts, as they stand right now.

Currently, the tax credit is for first time home buyers.

The purchased home must be closed on between January 1, 2009 and December 1, 2009.

(A new bill is being proposed that would extend the deadline until April of 2010).

Now, to take advantage of the FULL $8,000 house credit:

1. The home buyer must have an adjusted gross income of less than $75,000 or $150,000 for married couples filing jointly.
(These limits would be raised slightly if the new extension bill passes.) However, those who had more income than the specified amount allowed, could still qualify for a partial tax credit.
2. The home must have been purchased for less than $800,000.
3. The home must be your principal or primary residence.
4. The home cannot be purchased from an ancestor, descendant or spouse.
5. The tax credit is only for purchased homes, not homes you intend to purchase at a later date.
However, HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately. There may be some other ways to bypass this restriction, speak with an accountant or realtor to get the details.
6. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns).

Read more frequently asked questions about the housing tax credit for first time buyers at Federal Housing Tax Credit .com.

Read about the latest developments on extending the housing tax credit for first-time buyers at CNN.com.