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Sent: Tuesday, February 08, 2011 11:35 AM
Subject: IRS Tax Tip 2011-27: Eight Essential Facts about Claiming
|IRS Tax Tips
||February 8, 2011
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Issue Number: IRS Tax
Eight Essential Facts about Claiming
the First-Time Homebuyer
If you purchased a home in 2010, you may be
eligible to claim the First-Time Homebuyer Credit, whether you are a
first-time homebuyer or a long-time resident purchasing a new home. The
purchaser must have been at least 18 years old on the date of purchase;
for a married couple, only one spouse must meet this age requirement. A
dependent is not eligible to claim the credit.
Here are eight things the IRS wants you to know about claiming the
- You must have bought – or entered into a binding contract to buy – a
principal residence located in the United States on or before April 30,
2010. If you entered into a binding contract by April 30, 2010, you must
have closed on the home on or before September 30, 2010.
- To be considered a first-time homebuyer, you and your spouse – if
you are married – must not have jointly or separately owned another
principal residence during the three years prior to the date of
- To be considered a long-time resident homebuyer you and your spouse
– if you are married – must have lived in the same principal residence
for any consecutive five-year period during the eight-year period that
ended on the date the new home is purchased.
- The maximum credit for a first-time homebuyer is $8,000, half that
amount for married individuals filing separately. The maximum credit for
a long-time resident homebuyer is $6,500. Married individuals filing
separately are limited to $3,250.
- You must file a paper return and attach Form 5405, First-Time
Homebuyer Credit and Repayment of the Credit with additional documents
to verify the purchase. Therefore, if you claim the credit you will not
be able to file electronically.
- New homebuyers must attach a copy of a properly executed settlement
statement used to complete such purchase. Buyers of a newly constructed
home, where a settlement statement is not available, must attach a copy
of the dated certificate of occupancy. Mobile home purchasers who are
unable to get a settlement statement must attach a copy of the retail
- If you are a long-time resident claiming the credit, the IRS
recommends that you also attach any documentation covering the
five-consecutive-year period, including Form 1098, Mortgage Interest
Statement or substitute mortgage interest statements, property tax
records or homeowner’s insurance records.
- 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.
For more information about these rules including details about
documentation and other eligibility requirements for the First-Time
Homebuyer Tax Credit, visit http://www.irs.gov/recovery.
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