Homebuyer Tax Credit Chart 2010

find the article at:

"http://www.car.org/legal/legal-questions-answers/2010-qa/homebuyer-tax-credit-2010/"

 

March 30, 2010 (revised)

To help stimulate home sales, both the federal and state governments are offering tax credits for

Californians purchasing their piece of the American dream. Federal law offers up to $8,000 for firsttime

homebuyers and $6,500 for long-time residents. California law offers up to $10,000 for firsttime

homebuyers or buyers of properties that have never been occupied. Here’s a handy summary

of the two tax credit laws:

HOMEBUYER

TAX CREDIT FEDERAL CALIFORNIA

Amount of Tax

Credit 10% of purchase price not to exceed

$8,000 for First-Time Homebuyers or

$6,500 for Long-Term Residents.

5% of purchase price, not to exceed

$10,000 for first-time homebuyers or

buyers of properties that have never

been occupied. (See also Maximum

Credit for All Taxpayers.)

Date of

Purchase

By June 30, 2010, but taxpayer must

enter into a written binding contract by

April 30, 2010.

From May 1, 2010 to July 31, 2011,

but an enforceable contract must be

executed by December 31, 2010.

Principal

Residence Yes. Property purchased must be the

taxpayer’s principal residence which is

generally the home the taxpayer lives in

most of the time (26 U.S.C. § 121).

Yes. Property purchased must be a

qualified principal residence and

eligible for the homeowner’s

exemption from property taxes (Cal.

Tax & Rev. Code § 218).

Type of Property House, condominium, townhome,

manufactured home, apartment

cooperative, houseboat, housetrailer, or

other type of property located in the U.S.

Single-family residence, whether

detached or attached.

Home Page > Legal > All Legal Q&As > 2010 Q&As > Homebuyer Tax Credit Chart 2010

Eligibility

1. First-Time Homebuyer: Up to $8,000 if

buyer (and buyer’s spouse if any) has not

owned a principal residence during the

three-year period before date of

purchase; OR

2. Long-Time Resident: Up to $6,500 if

buyer (and buyer’s spouse if any) has

owned and used existing home as a

principal residence for 5 of the last 8

years.

1. First-Time Homebuyer: Up to

$10,000 if the buyer (or buyer’s

spouse if any) has not owned a

principal residence during the threeyear

period before date of purchase;

OR

2. Never-Occupied Property: Up to

$10,000 for a principal residence if

the property has never been

previously occupied as certified by the

seller.

Income

Restriction

Yes. Tax credit begins to phase out for

modified adjusted gross income (MAGI)

over $125,000 (or $225,000 for joint

filers). No tax credit at all for MAGI over

$145,000 (or $245,000 for joint filers).

No

Maximum

Purchase Price $800,000. N/A

Refundable Yes. Any amount of the tax credit not

used to reduce the tax owed may be

added to the taxpayer’s tax refund check.

No

Repayment No repayment required if the buyer owns

and occupies the property for at least 36

months after purchase.

No repayment required if the buyer

owns and occupies the property for at

least two years immediately following

the purchase.

Multiple Buyers

(not married to

each other)

Tax credit may be allocated between

eligible taxpayers in any reasonable

manner.

Tax credit must be allocated between

eligible taxpayers based on their

percentage of ownership.

Maximum Credit

for All Taxpayers N/A

$100 million for first-time homebuyers

and $100 million for never-occupied

properties, both on a first-come-firstserved

basis.

Reservations of

Credit

N/A

Yes. Buyer may reserve credit before

close of escrow for a property that

has never been occupied by

submitting a certification signed by

buyer and seller stating they have

entered into an enforceable contract

between May 1, 2010 and December

31, 2010, inclusive.

When to Claim

Full tax credit may be claimed on 2009 or

2010 tax returns.

1/3 of total tax credit may be claimed

each year for 3 successive years (e.g.

$3,333 for 2010, $3,333 for 2011, and

$3,333 for 2012).

Tax Agency Internal Revenue Service (IRS). Franchise Tax Board (FTB).

How to File First-Time Homebuyer Credit and

Repayment of the Credit (IRS Form

5405) to be filed with tax returns

Submit application to the FTB to

obtain Certificate of Allocation. The

FTB may prescribe additional rules

and procedures to carry out this law.

Other

Restrictions

Cannot be an acquisition from related

persons as defined; cannot be an

acquisition by gift or inheritance; and

buyer cannot be a non resident alien.

Cannot be an acquisition from related

persons as defined; buyer or spouse

must be 18 years old; buyer cannot

be another taxpayer’s dependent;

credit is allowed for only one qualified

principal residence; and credit

allowed cannot be a business credit

under Cal. Tax & Rev. Code §

17039.2.

Legal Authority

26 U.S.C. section 36.

Cal. Rev. & Tax Code section

17059.1 (as added by Assembly Bill

183).

Date of

Enactment November 6, 2009 (as revised). March 25, 2010.

More Information IRS Web site at

 

 

 

 

204671,00.html

FTB Web site at

http://www.irs.gov/newsroom/article/0,,id=.

http://www.ftb.ca.gov/

individuals/ New_Home_Credit.shtml

This chart is just one of the many legal publications and services offered by C.A.R. to its members.

 

Homebuyer Tax Credit Chart 2010