First-Time Homebuyer Credit Closing Deadline Extended to September 30, 2010

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The deadline for the completion of qualifying First-Time Homebuyer Credit purchases has been extended. Taxpayers who entered into a binding contract before the end of April now have until September 30, 2010 to close on the home.

The Homebuyer Assistance and Improvement Act of 2010, enacted on July 2, 2010, extended the closing deadline from June 30 to Sept. 30 for eligible homebuyers who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010.

Here are five facts from the IRS about the First-Time Homebuyer Credit and how to claim it.

1. If you entered into a binding contract on or before April 30, 2010  to buy a principal residence located in the United States you must close on the home on or before September 30, 2010. 

2. 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 purchase.

3. To be considered a long-time resident homebuyer, your settlement date must be after November 6, 2009 and 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.

4. The maximum credit for a first-time homebuyer is $8,000. The maximum credit for a long-time resident homebuyer is $6,500.

5. To claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract. New homebuyers must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property tax records or homeowner’s insurance records.

Contact OR Call 210-248-3397, India +91-80-41633973, if you are looking for professional advisory services. GVA is not an attorney or attorney firm. GVA has partnered with IRA Financial Services & NAFEP for Estate Planning services. Unless we expressly state otherwise in this post any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or other matter addressed herein..

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  • Imagine if you lent me $3,000 on the promise that I would pay you back by April 15th. Its now October, I haven’t paid you, and you dedice to buy a car from me for a price of $8,000.How much cash are you going to give me? Is there any way in the world you’re going to pay me $8,000 while I owe you $3,000 that is overdue?? I doubt it. The only logic thing would be to pay me $5,000 and call it even for the debt (assuming you’re nice enough to not charge interest and penalties). The IRS will do the only reasonable thing and use the money toward the debt first. You’ll only get a refund of what’s left, if anything. The good news is that this will take care of your debt or knock $8,000 off of it.

  • You can amend your 2008 tax rtuern, or claim it on your 2009 tax rtuern, just know that you will not receive the refund for the home buyers until processing is fully completed, processing of home buyer credit is taking up to 18 weeks. IRS will send you your 2009 refund timely. And when you do file for the first time home buyers credit make sure you include all the information needed and sign where it is required, If any information is missing and IRS must request additional info or signature, the process stops and then starts all over once your information is received. Adding another 6-8 weeks to the additional 16-18.Good luck!