Q: “I KEEP HEARING ABOUT THIS UP TO $8,000 TAX CREDIT IF I BUY A HOUSE. WHAT’S UP WITH THAT?”

CAROL ANNE: If you have not been on the title on a home for more than 3 years, if you make less than $75,000 for a single person or $150,000 as a couple, if you buy in the United States and close escrow before December 1, 2009, you’re probably eligible for the $8,000 credit.


Q: “DOES IT WORK FOR CONDOS OR MANUFACTURED HOMES OR CO-OPS OR TOWNHOUSES?”

CAROL ANNE: Yes, and sometimes even houseboats. Talk to your accountant or check it out at ww.irs.gov.



Q: “BUT I WON’T OWE $8,000 WHEN I FILE MY TAXES – I’M PROBABLY GETTING A REFUND. IS THIS $8,000 ANY GOOD TO ME?”

CAROL ANNE: Yes, it is. This is the cool part! If you don’t owe so much, then the IRS will cut you a check for the balance. For instance, if you owe no taxes, the IRS will send you the full $8,000 when you file plus whatever refund you’ve got coming. Them, say, if you owe $2,000 on your 2009 taxes, then you won’t pay the $2,000 and you’ll get a check for $6,000. Pretty sweet, isn’t it? Make sure that your tax guy knows to claim it for you.


Q: “SO IF I QUALIFY, I CAN BUY A $20,000 LOT WITH A "P.O.S." SHACK ON IT AND GET A TAX CREDIT OF $8,000?”

CAROL ANNE: That’s a good plan, but no. First of all, you have to claim this property as your principal residence, so you have to live there at least 51% of the time. Second, the tax credit is $8,000 OR 10% of the purchase price, whichever is less. If you bought this shack for 20 grand then your tax credit would be $2,000.


Q: “CAN I USE THIS $8,000 AS PART OF MY DOWN PAYMENT?”

CAROL ANNE: Probably not. We’ve heard of a few lenders that tried and one or two said that they succeeded, but we’re not hearing anybody saying that they can use the credit it towards the down payment anymore. If you find somebody, let us know, please.


Q: “DO I HAVE TO FILL OUT PAPERWORK AND GET APPROVED FOR THIS, TOO?“

CAROL ANNE: Nope. Assuming that you fit all of the parameters, just close escrow before December 1, 2009 and remember to tell your accountant to claim it on the new IRS form 5405.


Q: “DO I EVER HAVE TO PAY IT BACK?”

CAROL ANNE: Only in one situation: they call it the anti-flipping rule. If you sell the house before you’ve owned it for three years then the $8,000 must be paid back.

Q: MY WIFE AND I WILL BE CLAIMING INCOME OF $150,000 AND 1 DOLLAR. DOES THIS MEAN THAT WE’RE NOT ELIGIBLE FOR THE TAX CREDIT?

CAROL ANNE: No, you’re OK. If people go over the allowed limits there’s a nifty formula so that you can get at least a portion of the $8,000. It’s only when a single person makes over $95,000 or a couple makes over $170,000 that they’re totally out of luck. Talk to your accountant or the IRS.

Q: SO WHAT DO I DO NOW?
CAROL ANNE: CALL ME! 928.300.9031. December 1st is just around the corner!