More Answers To Your First Time Home Buyer Tax Credit Questions.
Update: The amendment allowing for the extension and expansion recently passed and was signed into law by the President. You can read up on the new rules and changes in “First Time Home Buyer Tax Credit – The New Extension And Expansion.”
What paperwork do I need to file?
As promised in the video, here’s the link to download IRS Form 5405 (pdf). I do advise all clients to keep all their closing documents in a safe place, just in case the IRS ever does an audit (and I would advise that with or without the tax credit). A great Realtor® will keep copies of all your files as well, so when in doubt, give them a call (I just had to dig up a deed yesterday for a past client who couldn’t find theirs).
Can I use the tax credit as a down payment?
There has been a lot of hype and misinformation about whether you can or can’t. The simple answer is no. A great article about this was written by my friend, Jeff Belonger over at ActiveRain and I highly recommend you read it – “FRAUD ALERT – Advice on the $8,000 first time homebuyers Tax Credit – Do you chance it???” If you are being advised by anyone to claim the credit from the IRS before you close on your new home – run, don’t walk, and find yourself some new professionals to work with. The IRS makes it very clear that you can not collect the before you close on the home:
Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment.
A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS news release 2009-27, First-Time Homebuyers Have Several Options to Maximize New Tax Credit, contains details for filing options if the home is purchased after April 15, 2009.
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Matt!
I love your videos! From what you said, I wasn’t expecting something so great! You really rock…these are wonderful!
Keep up the good work!
Tamara
Tamara – Thanks for stopping by. I’m glad you liked them. I need something a little better camera wise (the ones you do are always so clear), but for now, I’m enjoying doing them.
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