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The $15k homebuyers tax credit and your closing date

IMPORTANT! If the economic stimulus bill passes and the $15k homebuyers tax credit is part of the bill, your closing date will determine whether you receive or do not receive the tax credit if you are purchasing a primary residence.

It is very important that you watch the news carefully to find out what the effective date of the tax credit will be, presumably either the day the bill is signed by the President or the day after. The bill is expected to be signed by the President in the middle of February. There is a lot of money at stake so you may have to adjust your closing by a day or two in order to qualify for the tax credit.

UPDATE: Sunday February 15, 2009 8:30AM. This tax credit has been eliminated from the final bill and replaced with an $8k tax credit for first time homebuyers. The effective date for home purchases is between December 1, 2008 January 1, 2009 (updated and corrected February 18, 2009 7:00AM) and December 1, 2009. Click here for more details.

Published Friday, February 06, 2009 7:29 AM by Howard Arnoff

Comments

# re: The $15k homebuyers tax credit and your closing date

I remember this helped in the mid 70's...It's 10% of the house purchase up to 15000 (sale price:150,000) and it is a tax credit.  Unless you have AGI over 100k you're gonna leave some on the table. Did I read it right?

Friday, February 06, 2009 12:16 PM by Charlie

# re: The $15k homebuyers tax credit and your closing date

Charlie, it is a tax credit 10% of the purchase price up to $15,000. Since I'm not an accountant (or a legislator), it would be difficult to say what the fine print might have in store (especially for those with high incomes) but overall, it should help spur housing demand.

And just to clarify, and this is only my assumption, I don't believe that you will get $15,000 off your tax bill, rather, it is your income that is reduced by the $15,000 tax credit. I could be wrong but I haven't poured through the fine print of the bill.

Friday, February 06, 2009 1:11 PM by Howard Arnoff

# re: The $15k homebuyers tax credit and your closing date

Charlie, here is an update and I was wrong in the above comment.

First of all, since the bill has not yet been voted on by the Senate and then reconciled with the House, everything is subject to change until it is signed into law by the President.

However, right now, there is no cap on income and it is a tax credit so it would be fully applied to your total tax bill. If you owe less than $15k, it could be spread over 2 years.

But it does favor the higher income taxpayer.

Sunday, February 08, 2009 7:55 AM by Howard Arnoff
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