Will I Qualify For The Tax Credit ?
This will be my first home purchase but i will be purchasing the home with cash and i know the tax credit is 10% up to $8k. The home i am purchasing is only 30k. Do i qualify for the credit if purchasing the home with cash?
Yes, you do. Provided you occupy the propety as your primary residence. The tax credit is only for owner occupant, first time home buyers.
If you are single, and a first time homebuyer, your tax credit will be $3000 in your case. If you are married, then both you and your spouse must be first time homebuyers to get the full $3000 tax credit. If only one spouse qualifies, then the tax credit will be half, or $1500, for this property.
Thanks for your answer and i just got a property for 20k that needs about 7k of work and arv is 100k, i am excited.
I would like to correct my earler respsonse based upon clarifying guidance issued by the IRS.
For a married couple to qualify for the tax credit, both must be first time homebuyers. If either spouse fails the first time homebuyer test, then both fail. The tax credit is not divided between them even if one spouse files as married filing separately.
Remember, if you take the tax credit you will have to occupy this property as your primary residence for three years. Move out or sell in less than three years and you have to give back the tax credit.[ Edited by NewKidInTown3 on Date 07/25/2009 ]
""you will have to occupy this property as your primary residence for three years""
I dont think that is accurate, he will get his 3k tax credit on this purchase if he is a first time buyer. Its just very rare that a 1st time buyer, would buy a rental prop. I dont think i want to know where he will live until the flip is complete.
Good luck
rglover,
Until you really know what you are talking about, I suggest you refrain from responding to income tax questions.
read the fine print..
and did it get extended? I thought it had expired..
http://books.google.com/books?id=--pLHsdfhEoC&pg=PA209&lpg=PA209&dq=gulf+zone+accelerated+depreciation&source=bl&ots=ZpRqMrGFjH&sig=sT_vLWE7rSWDKpNDqoQiWCJGQq8&hl=en&ei=sgNsSrvBNpKEswPBhrmWBQ&sa=X&oi=book_result&ct=result&resnum=4
says has to be in service by 12/07.