First-Time Homebuyer Tax Credit ‘One of the most exciting provisions of the Housing and Economic Recovery Act of 2008 was the First-Time Homebuyer Tax Credit. The credit was expanded as part of the most recent economic ‘stimulus bill (The American Recovery and Reinvestment Act of 2009). The credit is designed to ‘encourage first time home buyers to go ahead and make the leap to purchase thelr first homes. Combine this tax credit with the fact that home prices and interest rates are at historical lows, and itis indeed an ideal time for many first-time homebuyers to purchase a home! Here are some things to keep in mind: + A first time home buyer is defined as someone who has not owned a home in the last three years + Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit + You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent {child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces, and others + If you are married, both spouses must be first-time home buyers + If more than one unmarried individual i buying the property, the credit can be split up among all the individuals who quaify. However, the total credit taken cannot exceed $7,500 for homes purchased in 2008 and $8,000 for homes purchased in 2009 For Homes Purchased Between April 9, 2008 and December 31, 2008 + The credit amounts to 10% of the purchase price of the home not to exceed $7,500 + The tax credit works like an interest free loan and must be repaid over a 15 year period For Homes Purchased Between January 1, 2009 and December 1, 2009 + The credit amounts to 10% of the purchase price of the home not to exceed $8,000 + The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling itFirst-Time Homebuyer Tax Credit IP: How does a tax credit work? ‘A tax credit is a special provision that reduces income tax labllty on a dollar for dollar basis. When filing a tax return, ‘you must include income items, deduction tems and the number of exemptions, among other things, to figure your total tax liability. For example, if your total tax lability for the year is $8,000, and you qualify forthe full $8,000 tax credit, this credit would wipe out all ofthe tax due. If your employer already deducted the $8,000 from your pay checks throughout the year, you would receive a tax refund of $8,000. If you owe less than $8,000 in taxes forthe year, you are stil eligible for the full $8,000 credit when you file your tax returns. In that case, the IRS will write you a check forthe difference between $8,000 and your actual tax bil For more information about the first-time home buyer tax credit or other recent updates to the mortgage and real estate markets, just give me a call. would be happy to assist you with your mortgage in the purchase of your new home! To ensure compliance with requirements imposed by the Intemal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding fax-related penaities or (i) promoting, marketing or recommending to another person any transaction or mattor addressed in this communication. Also, itis important to note that | am providing this information to you as your mortgage planner, in order to make you aware of some of interesting ideas that may benefit you. lam not an iavestment, tax, or legal advisor, and this information does not constitute legal, tax or investment advice. I definitely recommend that you consult with properly licensed legal, tax and investment advisors for specitic advice pertaining to your individual situation. Brent Hart, CMPS” PrimeLending, A PlainsCapital Company 6900 8, MeCartan Blvd, Suite 2020 eno, NV 89509 829-3085 direct 848-6406 alternate 866-712-9379 fax bhart@primelending.com buipi/vww.BRENTHART.com