Tax credit questions answered

Can you claim the $8k tax credit on your 2009 returns for a house you bought in 2010? Do you need to be a current homeowner in order to claim the new ‘existing homebuyers’ credit? The answers may surprise you.

According to this IRS info sheet on the homebuyer tax credits, “The credit for homes purchased in 2010 can be claimed on either the 2009 or 2010 tax return.”

Additionally, according to the IRS, “you do not have to own a home at the time you make your new purchase. But you must satisfy the criteria for having owned and lived in a home as your primary residence for a five-consecutive year period that falls somewhere within the eight-year time frame that ends on the date you buy the home on which you are claiming the credit.

Thus, if you make a qualifying home purchase on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, to Nov. 30, 2009. If you bought your previous home on Nov. 1, 2003, and continued living in it as your main home until at least Oct. 31, 2008, you will meet the five-consecutive year requirement. In this situation, you will still qualify for the credit even if you didn’t own a home from Nov. 1, 2008, to Nov. 30, 2009, but you instead, for example, lived in a rental home during that period.”

as always, check with your accountant or tax professional before filing.

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