Obama Extends Home-Buyer Credit

President Obama signed the Worker, Homeownership and Business Assistance Act of 2009 (WHBA) into law on November 6.

The new law extends the deadline for qualifying home purchases from November 30, 2009 to April 30, 2010.

The maximum credit is $8,000 for first-time buyers.  Qualifying purchasers must not have owned a primary residence for three years prior to the date of purchase.

Additionally, the new law creates a “long-time resident credit” of up to $6,500 for buyers who have owned and resided in their previous home for at least five consecutive years of the previous eight years.

Purchases consummated in 2010 may be reported on either the 2009 or 2010 tax returns.

The credit is claimed on Form 5405, First-Time Homebuyer Credit.  Copies of the form may be downloaded from the IRS website at www.irs.gov.

The credit is phased out for higher-income taxpayers and is not allowed if the purchase price exceeds $800,000.

The purchase date is extended an additional year for members of the Armed Forces.

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