Time is running out on the federal tax credits for first-time and repeat buyers. First-time buyers who enter a binding contract by April 30 and close escrow before July 1—and meet the income limits—are eligible for the full $8,000 credit (maximum, or 10 percent of the sales price, whichever is less) on their federal tax returns. The first-time home buyer credit applies to homes purchased for $800,000 or less, and does not require repayment if buyers live in the residence for three or more years.
Existing homeowners may be eligible for a tax credit (10 percent of the purchase price, not to exceed $6,500). To be eligible for this credit, homeowners must have lived in their current home for five consecutive years out of the last eight years and must enter a contract to purchase a new or existing home by April 30, 2010. Existing homeowners do not need to sell their current home to qualify for this credit, but must close escrow before by June 30, 2010. For complete details on these credits, qualifications, income levels and income phase-outs, visit “Legal Q&As” at car.org.
Please note that “Tax Credits Set to Expire,” an article which appeared in the March/April “issue of California Real Estate magazine, is available in downloadable format at http://www.onlinedigitalpubs.com/publication/?i=33583. The article has been updated to correct misinformation that appeared in the print edition.
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