Original Post
The first-time homebuyer or long-term-owner tax credits of up to $8,000 or $6,500 respectively expired generally on April 30, 2010. The actual amount of the credit depends on several factors, including a phase-out based upon modified adjusted gross income. However, a transition rule allows the credit to those who had a written binding contract to purchase or construct a new principal residence by April 30, 2010, and who close on the purchase or receive their certificate of occupancy by June 30, 2010. Immediate steps should be taken to ensure that the closing or issuance of the certificate of occupancy happens on time. The credit is claimed on Form 5405 and certain documentation such as a copy of the binding contract, the settlement statement or certificate of occupancy, and other information must be attached to the form. The credit may be claimed on either your 2009 or 2010 tax return. Planning may be necessary to determine the best tax year in which to claim the credit.
July 1, 2010 Update
The ending date of the transition rule has been extended from June 30, 2010 to September 30, 2010. This will give an estimated 180,000 homebuyers who would miss the earlier date more time to complete their purchase or finish constructing their new principal residence. Congress enacted the extension on June 30th (H.R.5623) and Pres. Obama is expected to sign the legislation shortly.
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