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More questions about the first-time homebuyers credit

Print Posted by Jill Boynton March 10, 2009 10:00 AM

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Here are answers to some of the questions we've received about the First-Time Homebuyer's Tax Credit. Many questions can be answered by going to the IRS home page (www.irs.gov) and clicking on the link for the "Update on Recovery Tax Provisions for Individuals and Businesses." In addition you can download Form 5405 (First-Time Homebuyer Credit Form) and find details within the instructions for filing this form.

"If you own a mobile home and are purchasing a home are you eligible for the 8,000 credit.? I have heard that a mobile home is not considered a home per say." We've received many questions about mobile, or manufactured, homes. These homes qualify as a personal residence, as do houseboats, housetrailers, coops and condominiums. Therefore you will not qualify for the credit since you already own a home.

"I am divorced and live in the home my ex husband and I purchased in 97. In December 08 I refinanced this home and it is now solely in my name. I am planning to sell this home and purchase a new home this summer. Will I be considered a first time homeowner? " Unfortunately you will not be considered a first-time homebuyer, as you will have owned a home within the 36 months prior to the purchase of your new home this summer.

"On the "tax credit available for 1st time buyers" how would that work with a same-sex couple that is not legally married? can both claim the deduction on their 2009 taxes since they are co-signers or just 1 party?" You are eligible to share the credit and can allocate it using any reasonable manner. That means one of you can take the entire deduction if you so decide, or you can allocate it according to such methods as percentage of downpayment or percentage of ownership.

"Does the tax credit appy if the client is doing a construction loan?" Yes, construction loans qualify for the credit. You are treated as having purchased the home on the the date you first occupy it.

"Is the $8000.00 a credit over an above a refund. For example if someone were to get a $1500.00 refund from federal, would their total refund be $9500.00 with this new tax credit.?" You are correct. The credit is payable even if you do not owe tax.

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Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

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About the contributors

Andrew Chan is the founder of Integrative Financial Advisors in Framingham. He provides comprehensive financial planning advice and investment management services. He has been an adviser for over 12 years and works with clients to integrate all aspects of their finances including investments, retirement, education funding, and tax planning.

Cheryl Costa is a principal at Forteris Wealth Management which is an independent, fee-only firm with offices in Framingham and Purchase, NY. She advises clients on investing, education funding, taxes and retirement planning. She has a BS from Worcester Polytechnic Institute and an MBA from Boston University and she is a Certified Financial Planner.

Jamie Downey has been an accountant for more than 14 years. He's a partner at Downey & Co. in Braintree. Prior to joining the firm, he served as a manager in the audit department of accounting firm KPMG.