First Time Home Buyer Credit
By Tracey Yergey
The American Recovery and Reinvestment Act of 2009 that was passed by Congress on February 17, 2009 increased the maximum amount of the First Time Home Buyer's Credit to $ 8,000 (previously it was $ 7,500). The credit is refundable (previously there was a 15 year payback for the $7,500). The home must be purchased between January 1 and November 30, 2009. The amount of the credit is 10% of the purchase price of a principal residence of a taxpayer who has not owned a US principal residence in the previous three years.
Important - The IRS stated that inheriting a home and living in the inherited home as a principal residence would preclude an individual from being considered a first time home buyer. Also an acquisition from a related person (including spouse) is not a qualified purchase.
Unmarried Co-Purchasers - The IRS says that the credit may be allocated between two or more eligible co-purchasers of a principal residence who are not married to each other. Any reasonable method may be used, including assigning the credit fully to one co-owner.