IRS provides new first-time homebuyer credit form
A new Form 5405, First-time Homebuyer Credit and Repayment of the Credit, is now available for taxpayers claiming the credit on their 2009 income tax return. Because taxpayers are required to file a paper version of this form and new documentation requirements must accompany the form, the IRS reported that delivery of refunds may be slower than normal.
Taxpayers purchasing a home for the first time during 2009 may claim a credit equal to 10 percent of the purchase price of the principal residence with a maximum of $8,000 (or $4,000 for married couples filing separate returns). The Worker, Homeownership, and Business Assistance Act of 2009 also created a reduced tax credit (up to $6,500) for taxpayers who are qualified long-time residents of a home, but purchase a new principal residence during 2009.
To claim the credit for the 2009 tax year, taxpayers are now required to include documentation to substantiate their claim, in addition to their paper return. Required documentation includes a settlement statement in the form of a properly executed HUD-1 or a copy of the certificate of occupancy where a settlement statement is unavailable for a newly constructed home. Taxpayers claiming the reduced credit because they are qualified long-term residents should attach Form 1098, Mortgage Interest Statement, property tax records, or homeowner’s insurance records with their return.
Please let us know if you purchased a new home during 2009, and we will be sure to inform you of what documents you will need to gather to file your return and claim the credit.
Tags: Asset Purchases
Uncategorized | GBA February 1, 2010
