First-Time Homebuyer Credit has Expired as of May 1, 2010

Absent further Congressional action, both the regular $8,000 first-time homebuyer credit and the reduced $6,500 credit for long-term residents will generally expire for homes purchased after April 30.

The current provision extended the first-time homebuyer credit to apply to a principal residence bought before May 1, 2010; it also applies to a principal residence bought before July 1, 2010 by a person who enters into a written binding contract before May 1, 2010, to close on the purchase of the principal residence before July 1, 2010. Certain service members on qualified official extended duty service outside of the U.S. get an extra year to buy a qualifying home and get the credit; they also can avoid the recapture rules under certain circumstances.

For purchases after Nov. 6, 2009, a taxpayer(s) may claim the homebuyer credit if the taxpayer(s) maintained the same principal residence for any 5-consecutive year period during the 8-years ending on the date that the taxpayer buys the subsequent principal residence. The maximum allowable homebuyer credit for such taxpayers, who are treated as first time homebuyers for purposes of the first-time homebuyer credit, is $6,500 ($3,250 for a married individual filing separately), or 10% of the purchase price of the subsequent principal residence, whichever is less.

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