Homebuyer Credit Now Available to "Long-Time Residents"

The first-time homebuyer tax credit that was to expire on November 30, 2009, had been extended to April 30, 2010 (June 30, 2010 if a binding agreement to purchase was signed by April 30, 2010 and closing occurs by June 30, 2010).  The credit has been expanded to include long-time homeowners who purchase another home to use as their new principal residence after November 6, 2009 and by the dates indicated above.  An eligible long-time homeowner is any individual (or the individual's spouse if married) who has maintained the same principal residence for any 5 consecutive year period during the 8-year period ending on the date of the purchase of the new principal residence.  The maximum allowable credit for this purpose is the lesser of $6,500 or 10% of the purchase price.  Homes costing more than $800,000 are not eligible.  The credit is phased out for individual taxpayers with modified adjusted gross income between $125,000 and $145,000 ($225,000 and $245,000 for joint filers).  This new provision can help "empty nesters" downsize to another home.  There is no requirement that the previous home first be sold.