Have you ever been on “YahooAnswers!”?  It is a forum for people to ask questions and get answers on a variety of topics, including tax issues.  As someone who answers tax questions, I see numerous posts about the First-time home buyer credit, especially as we approached the original November 3oth deadline.  But good news arrived earlier this week when President Obama extended the deadline. 

 “The Worker, Homeownership, and Business Assistance Act of 2009,”a measure that extends the qualification period of the first-time home buyer credit for purchases of a new home from ending before December 1, 2009 to ending before May 1, 2010, and expands the pool of home owners qualified to benefit.  First-time home buyers who have not owned a principle residence for 3 years prior to the purchase of a new home could continue to take a credit of up to $8,000.  For homes purchased after December 31, 2008, the credit will not have to be repaid if the home buyer uses the home as their principal residence for 3 or more years. 

And good news for those serving in the military... Military personnel will not be penalized if they claimed the credit and had to deploy and sell their home within three years.  In addition, this act has a new definition of 'first time homebuyer' that will , no doubt, open doors to many.  Homeowners who have owned a home and used it as a principal residence for a consecutive 5 year period during the 8-year period ending on the date of purchase of a new personal residence may qualify for a credit of up to $6,500.  To act on this credit, the taxpayer must have a signed purchase contract for a principal residence in force before May 1, 2010 and must close on the purchase by June 30, 2010.  This credit is only available for purchases after November 6, 2009.  The bill also places an upper limit on the purchase price of the home of $800,000.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.