Homeowners' credit

[Daune/CA]

A t/p HOH w/2 children, filed thru/HRB beginning of 2010. As of 3/23/10 t/p purchased a home. Is she entitled to credit, and if so, which year-2009 or 2010? If 2009, is a corrected return sent or an amended return, or should it be taken w/2010 filing? Since not doing taxes this yr, I have not kept up with current laws and changes. Thank you for any assistance.

[mcb39]

File an amendment for 2009 so she doesn't have to wait an entire year for her credit.

[kcjenkins]

She can claim it in either year, whichever works best for her. That is assmuming she qualifes for the credit. You ask if she is entitled to it, but don't give us enough details to determine that. I suggest you look at the IRS website, where they have a good section on this very question. It's not a simple answer, it depends on a number of different factors.

[Pacun]

She has a choice to amend 2009 or wait to claim it in her 2010 filing.

[Terry D EA]

Maybe I am missing something here but why wouldn't the credit just be taken on the client's 2010 tax return? We are filing for the 2009 tax year and the home wasn't purchased in 2009 but in 2010. Why would you amend something that hasn't occurred yet? Or better yet, how can you claim a credit for something in one year when the event that triggers the credit doesn't occur until the following year? :wacko:

[TAXBILLY]

Rule Changes For Qualified Purchases Made After November 6, 2009:

Last line:

Credit Limitation: The credit limit remains $8,000 for qualified first-time homebuyers, however, long-time residents who owned and used the same principal residence for any 5 consecutive years of the last 8 years prior to purchasing a subsequent new principal residence, may now qualify for a tax credit of up to $6,500.

Income Limitation Is Increased: The Modified Adjusted Gross Income Limitation at which the credit will begin to be phased-out is increased to $125,000 for single taxpayers and $225,000 for joint taxpayers.

Purchase Price Limitation: No credit shall be allowed for the purchase of any residence if the purchase price of such residence exceeds $800,000.

Restriction for Age and Dependents: No credit shall be allow for the purchase of any residence unless the homebuyer (or spouse if married) has attained age 18 as of the date of such purchase. In addition, no buyer may take a credit if he or she can be claimed as a dependent on someone else's return.

Documentation Requirement: Buyers will be required to submit a copy of their settlement statement to claim the tax credit.

Claiming the Credit: Under the new law, as under the old, 2009 homebuyers may claim the credit on either their 2008 or 2009 returns, and 2010 buyers may claim their credit on either their 2009 or 2010 returns.

taxbilly

[kcjenkins]

Terry, you are missing something. Taxpayers have the option to get the rebate faster, by amending their 09 return for the 2010 purchase, assuming that they qualify for it. Congress did that in hopes of getting the rebate money out faster, for a faster 'stimulus', don't you know?

[Terry D EA]

Yeah, I thought about that after I made the post and realized that I goofed. Under normal circumstances (whatever normal may be), claiming a credit in a year that the event that triggered the credit took place in another year wasn't possible. Thanks for keeping me straight on this.