Tax, Tax and more tax! Not the most exciting topic we know…but all is not lost! – We all know that details on the $8000 first time homebuyer tax credit were readily available. But information on the $6,500 was always hard to come by.

However, now the IRS has issued official guidance – several months after President Obama signed the legislation creating the program.

The IRS posted its revised Form 5405 on its website on Jan. 15, six weeks after the agency warned taxpayers not to file claims for the $6,500 credit without using the revised form and new instructions. Homeowners who have occupied the same property as a principal residence for any five consecutive years during the previous eight years may now be able to claim a tax credit on a purchase of another home they intend to use as a principal residence.

The maximum purchase price on homes eligible for the credit is $800,000. Buyers are not required to sell their previous home, but they must be able to demonstrate that the replacement home they buy is or will be their principal residence. The credit is for as much as 10% of the price of the replacement home, capped at $6,500. The purchase contract must be dated from Nov. 7, 2009, to April 30, 2010, and the closing must occur no later than June 30. Members of the armed forces and federal diplomatic and intelligence personnel stationed overseas get an extra year to claim the credit. Note that taxpayers who sell their homes within a 36-month period after purchase or use the property for rental or business have to repay the credit.

The new IRS guidance also spells out the revised income limits for home buyers claiming credits: Your modified adjusted gross income must be $125,000 or less if you are single, or $225,000 or less if you are married filing jointly. Above these limits, the allowable credit amount begins to phase down in increments, and it is eliminated once incomes reach $145,000 for singles and $245,000 for married joint filers.

So there you have it, you have 14 weeks to sign a contract and then 5 months to close! The time to buy that Malibu home is now!

If you are interested in purchasing a property or selling a property in Malibu, Pacific Palisades or the surrounding Beverly Hills/southern California area then please contact Judy Kunisaki for professional real estate advice in the Westside Los Angeles area, on 310-317-8396 or via her online contact form on her website.

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Judy Kunisaki – CA DRE license 00963582

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