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My wife and I are planning on buying our first home in NC while we live in NJ for another several months before moving into the new home. Our question is would we qualify for the $8000 first time home buyer's tax credit given this arrangement. Do we have to be living in the home in NC within a certain time frame? We will not be renting this residence and this will be our primary residence when we finally do move in several months from the date of closing. Please advise. Thank you!
As far as I know the deal is that you have to be under a binding contract by April 30th and close on the property by June 30th in order to qualify. Whether or not you actually move in on June 30th should be immaterial.
However, do to some issues with fraud the IRS is asking for a lot of proof. My wife and I had to show our HUD statement as well present a bill showing our name and new address (we used car insurance) and copies of our licenses with the updated address. If you aren't planning on moving in right away you may have a hard time providing all the proof you need if you are planning on filing an ammended 2009 return to get the credit this year. If you are waiting until 2010 to file with your regular return you shouldn't have any issues.
When you file taxes on April 12 you are filing for 2009- so the short answer is it makes no difference until you file taxes for 2010 unless your tax preparer tells you differently.
Asking these tax related questions to mortgage professionals is like asking your primary care doctor to explain in detail the arthroscopic knee surgery you just had done with an orthopedic surgeon. He has general medical training and he has a knee but has doesn't have any idea what went on during surgery. We are familiar with it but are hardly your best source of information regarding tax relayed matters.
When you file taxes on April 12 you are filing for 2009- so the short answer is it makes no difference until you file taxes for 2010 unless your tax preparer tells you differently.
Actually, the short answer is that you're wrong.
A slightly longer answer would contain this information from the IRS:
"Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return."
In 2009 we saw many trying to refile their 2008 taxes to get the tax credit sooner. Only no one told them amended returns were handled 100% manually and took over 6 months to process. If they would have waited to file at the regular time, they would have received their money earlier. For this reason, I would never recommend filing an amended return, but file for the credit at the next return filed.
It is my understanding that the home must be for a primary residence. Check with your accountant what defines an investment property. At one time, anyone that collected $250 a year in rent qualified as an investment property.
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