New homeowner tax help

Can you help me understand what tax deductions or credits or whatever else I'm entitled to as a new homeowner. We purchased the house in Virginia last April.
Thanks.

Monday, October 18, 2010

Hello. If you closed on your house by April 30, 2010, and you are a first time homeowner, you are entitled to a tax credit of up to $ 8,000.00 on your 2010 federal Individual Income Tax Return, which is due by April 15, 2011. This $ 8,000.00 tax credit has the effect of reducing any income tax liability that you have for 2010, and if this $ 8,000.00 tax credit exceeds such income tax liability, then the difference becomes part of your refund.

Thank you.

Additionally, there are new benefits for members of the military and certain other federal employees:

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Question and Answer

Sunday, October 24, 2010

Please note that the repayment of the credit requirement only applies to the First Time Home Buyer Credit that was taken on 2008 federal Individual Income Tax Returns, not 2009, 2010 nor 2011. This military provision is interesting. From which federal law is this stated? Is it the Heroes Act of 2008?

Thank you gentlemen. I am a little confused. I understand the $8000 credit. But I am confused about the "recapture"? Does that mean we have to give back the credit at some later date. Also, Mr. Liberati says we had to close by 30 Apr, 2010. But Nick says we have until 30 Apr 2011, or is that just for military personnel? We closed on the house 06 Nov 2009, did not take the credit in that year. Can I take it in 2010? Can i correct the 2009 if we did it wrong. It's all above my head. I appreciate your help.
Guillermo

Monday, October 25, 2010
10:46 p.m. Eastern Daylight Saving Time

Recapture means that the First Time Home Buyer Credit is an interest free loan from the Internal Revenue Service, and this would have to be paid back, ratably, over 15 years, I believe, commencing with 2010. However, this only applied to the original First Time Home Buyer Credit, which was up to $ 7,500.00, for 2008. Any First Time Buyer Credits taken in 2009, 2010, or 2011 - of up to $ 8,000.00 - do not have a repayment element in it, and they do NOT have to be paid back to the Internal Revenue Service. You say that you closed on your house on November 06, 2009, which is before the general deadline of April 30, 2010. You were supposed to take the up to $ 8,000.00 First Time Home Buyer Credit - with NO repayment - in 2009. Since you did not, you cannot claim it in 2010 since you closed in 2009. However, you can file an amended federal Individual Income Tax Return for 2009, Form 1040 X, and claim this First Time Home Buyer Credit of up to $ 8,000.00.

The extension until 2011 is for military and certain other federal employees only. Monroe is correct in that you would have to file a amended return. If the home was purchased in '09 you do not have to pay back the credit BUT if purchased in '08 you do have to pay it back.