Wednesday, December 16, 2009

Tax Update on Home-buyers Credit

The IRS has not updated Form 5405 to carry back the tax credit on a home purchased after November 6th. The rules for the third incarnation of the credit are different than the previous credits and required a complete reworking of Form 5405.

There is now a new $6,500 credit for those that owned a home five of the last eight years. Also, homes purchased after November 6th must not exceed $800,000; there was no ceiling prior to this. A signed closing statement must accompany Form 5405.