Archive for the ‘Home Ownership’ Category

IRS Tool for Homebuyer Credit

March 3, 2013

A few years ago, to stimulate the housing market Congress created a special credit for certain people buying homes. It was called the first-time homebuyer credit, although it wasn’t strictly limited to people who had never owned a home. The first version of the credit was really an interest-free loan made through the tax system: qualified taxpayers received the credit in the year they bought the home but had to repay it through “recapture” of the credit over a number of years. If you claimed this version of the credit and are unsure where you stand in terms of repaying it, the IRS has a new tool on its website where you can look up this information. (Taxpayers who used the revised version of this credit do not have to repay it.)

link: First Time Homebuyer Credit Account Look-up

Trusted but Discredited

May 10, 2012

In a brief summary opinion (PDF) the Tax Court held that an individual who otherwise qualified for the first-time homebuyer credit would not be allowed to claim it because he bought the home from a family trust that was a “related person” for purposes of these rules. The taxpayer argued that the credit should be allowed where the trustee and the homebuyer are not the same individual, but the court rejected that argument.

Boost in Deduction for Large Mortgages

October 23, 2010

The tax law isn’t always crystal clear, and when it comes to a question of interpretation, the IRS doesn’t always agree with the Tax Court. The tax agency may appeal a ruling, or simply announce that it will continue to take a contrary position. Normally this happens when the IRS believes the Tax Court has been too generous. In a man-bites-dog story, the IRS recently announced it won’t follow a Tax Court interpretation relating to the mortgage interest deduction because it was too strict. (more…)

Deadline Looms for Homebuyer Credit

September 11, 2010

If you entered into a contract to buy a home by the end of April, you have until the end of September to close on the purchase if you want to claim the homebuyer credit.

Friday Wrapup

July 2, 2010

A rare break in congressional gridlock produced some actual tax legislation this week, albeit of limited scope. In addition, it appears we may be heading toward an expansion in the use of Roth retirement accounts. (more…)

Homebuyers May Get Reprieve

June 30, 2010

Update: this legislation has been passed by the Senate as well as the House, and becomes law upon being signed by President Obama.

Under current law, the homebuyer tax credit is available only if you had a binding contract by April 30 and close on your transaction by June 30. The June 30 closing deadline has posed problems for some purchasers, and on June 29 the House of Representatives passed a law that would extend the closing deadline to September 30. The Senate must act before this bill can become law.

This bill would extend the closing deadline but does not make the credit available to people who did not have a binding contract by the April 30 deadline.

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