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Valuable information about the tax credit for home buyers and home sellers

First-time home buyers and current homeowners looking to take advantage of the home buyer tax credit have only two months left to get under contract on their home purchase. Eligible buyers must enter into a contract by April 30, 2010, and close the transaction no later than June 30, 2010.

Here are some lesser-known facts about the tax credit to keep in mind:

• The tax credit can be claimed for detached houses, condominiums, townhomes, co-ops or a mobile home, manufactured house or travel trailer that is affixed to land. A mobile home or travel trailer that's on the road doesn't qualify.

• The seller of the home cannot be a close relative of the homebuyer, such as a grandparent, parent, spouse, child or grandchild.

• An unmarried homebuyer or at least one spouse of a married couple must be at least 18 years old to qualify for the tax credit.

For more information about the First-time home buyer tax credit go to http://www.irs.gov/newsroom/article/0,,id=204671,00.html

How to Get the Extended Home Buyer Tax Credit

You've decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here's what you have to do to get your benefit:

1.   Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract by April 30, 2010 and close by July 1, 2010.

2.    Decide whether to: 

•  apply the credit to your 2009 tax return, filed on or before April 15, 2010;

•   file an amended 2009 return; or, 

•  apply the credit on your 2010 return, filed on or before April 15, 2011.

3.   Attach documentation of purchase to your return.

Documentation of Purchase

Details concerning the precise documents required to confirm your purchase have not yet been released. When this information becomes available, we will include instructions and links to the appropriate forms.

When to Apply the Credit

Buyers purchasing homes on or before December 31, 2009 may claim the credit on their 2009 tax returns.

Buyers purchasing in 2010 will have the option to:

•   Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;

•   File an amended return for 2009 if their purchase is completed after April 15, 2010; or,

•  Claim the credit on their 2010 tax returns.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

1.   Fill out Form 5405 to determine the amount of your available credit;

2.   Apply the credit when you file your 2009 tax return or file an amended return;

3.   Attach documentation of purchase to your return or amended return.