Tax credit info for home buyers AND home owners! These are the initial rules approved in February 2009 as the government's $787 billion economic stimulus package that included several opportunities for individuals and families to lighten their tax load. Of particular interest are the tax savings specifically geared for home buyers and home owners. The new tax laws have specific limitations, so people need to pay close attention. Of course, all tax-related actions and decisions should be reviewed by a professional tax advisor. So the following is meant to simply get the conversation started. 1. $8,000 (or 10% of the selling price, whichever is less) tax credit for first-time homebuyers. Now get this – anyone closing on a home before they file their 2008 tax returns can elect to take the credit on those 2008 taxes. But they'll only get a $7,500 tax credit, even though they bought their home in 2009. If they can wait to take the credit when they file their 2009 tax return next year, they'll get the whole $8,000. 2. Green tax credits for homeowners. There is now a $1,500 lifetime tax credit for home improvements such as energy-efficient windows, doors, mechanical systems and insulation.
PLUS: Homeowners can now take a 30% tax credit for every dollar they spend on green upgrades like solar heaters, heat pumps and fuel cells. The credits apply through 2010. These tax credits are a great help to sellers wanting to make their homes more attractive. 3. Tax relief on short-sale and foreclosure forgiveness. This benefit is for homeowners who experience a short sale or foreclosure where the proceeds are less than the amount owed on the mortgage. In the past, that forgiven debt was treated as taxable income. But from now through 2012, the forgiven debt will NOT be taxed as income. There is a limit of up to $2 million of forgiven debt on the principal residence. Taxpayers do not have to put the amount on their tax form, even if they receive an IRS Form 1099 from the lender. |