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| 617- 984-8388 info@MagicRealtyInvestment.com Judysong2006@yahoo.com |
| Magic Realty Investment Services 617-984 8388 692 Hancock Street, Quincy, MA 02111 |
*NOTE: This document is for informational purposes and should not be construed as tax or legal
advice. For specific advice on their own tax situation consumers should always consult a qualified
tax professional.
1. Who are eligible homebuyers? Has eligibility been expanded to include existing homeowners?
Eligible homebuyers now come in 2 categories:
1. 1st-Time Homebuyers. Any person who has not owned a principal residence in the past 3 years
may qualify as a 1st-time homebuyer, subject to income restrictions (greatly increased, see #2,
below).
2. Long-Time Residents of Same Principal Residence. Someone who has owned a home and
occupied it as the principal residence for any consecutive 5-year period during the last 8 years
may also be eligible for a credit, also subject to the new income ceilings. This does include current
homeowners, so long as the home was both owned and occupied by the taxpayer for at least 5
consecutive years.
2. What are the new maximum income levels?
1. 1st-Time Homebuyers. The Modified Adjusted Gross Income limit is now $125k for singles,
$225k for couples.
2. Long-Time Residents of Same Principal Residence. Same: $125k for singles, $225k for
couples.
“Modified Adjusted Gross Income” (MAGI) is defined by the IRS. To find it, a taxpayer must first
determine "Adjusted Gross Income" (AGI). AGI is total income for a year minus certain deductions
(known as "adjustments" or "above-the-line deductions"), but before itemized deductions from
Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last
number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on
line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest
income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign
income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and
deductions for higher-education costs. Singles cannot make more than $125,000 in MAGI, and
married couples cannot make not more $225,000 in order to get the maximum credit (see #3,
below). Partial credit is available for those with MAGI between $125k to $145k ($225k-$245k for
joint filers).
3. Has the credit amount been increased?
No. But the maximum credit amount is different depending on whether the taxpayer is a 1st-Time
or Non-1st-Time Homebuyer.
1. 1st-Time Homebuyers. Full credit is still $8,000* ($4,000 if married filing separately).
2. Long-Time Residents of Same Principal Residence. Full credit is $6,500* ($3,250 if married
filing separately).
You will get this money in the form of a Federal Tax Refund, just as always. Also, though it is still a
true credit, as opposed to a loan (recall the 2008 version), recapture or repayment would still be
required if you sold your home within 36 months of purchase.
* $8,000/$6,500 or 10% of purchase price, whichever is less. The 10% figure applies only when
the purchase price is less than $80,000/$65,000.
4. What housing qualifies as a Principal Residence purchase?
The date of purchase has been extended to July 1, 2010, so long as a binding P&S agreement
was executed (signed) by April 30, 2010.
As before, single family homes, condos, townhouses, and co-ops qualify so long as they are used
as the taxpayer’s principal residence. Homes purchased last year do not qualify for this program.
Also, sales between immediate family members are ineligible. It is also important to note that th
purchase price of the home cannot exceed $800,000.
Also, sales between immediate family members are ineligible.
This Q&A is intended to provide a quick overview. There are numerous other provisions in the
new credit, and homebuyers should understand them clearly before they make any decision
regarding their eligibility. Please review the more detailed information sheets on the MAR Home
Page.
advice. For specific advice on their own tax situation consumers should always consult a qualified
tax professional.
1. Who are eligible homebuyers? Has eligibility been expanded to include existing homeowners?
Eligible homebuyers now come in 2 categories:
1. 1st-Time Homebuyers. Any person who has not owned a principal residence in the past 3 years
may qualify as a 1st-time homebuyer, subject to income restrictions (greatly increased, see #2,
below).
2. Long-Time Residents of Same Principal Residence. Someone who has owned a home and
occupied it as the principal residence for any consecutive 5-year period during the last 8 years
may also be eligible for a credit, also subject to the new income ceilings. This does include current
homeowners, so long as the home was both owned and occupied by the taxpayer for at least 5
consecutive years.
2. What are the new maximum income levels?
1. 1st-Time Homebuyers. The Modified Adjusted Gross Income limit is now $125k for singles,
$225k for couples.
2. Long-Time Residents of Same Principal Residence. Same: $125k for singles, $225k for
couples.
“Modified Adjusted Gross Income” (MAGI) is defined by the IRS. To find it, a taxpayer must first
determine "Adjusted Gross Income" (AGI). AGI is total income for a year minus certain deductions
(known as "adjustments" or "above-the-line deductions"), but before itemized deductions from
Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last
number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on
line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest
income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign
income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and
deductions for higher-education costs. Singles cannot make more than $125,000 in MAGI, and
married couples cannot make not more $225,000 in order to get the maximum credit (see #3,
below). Partial credit is available for those with MAGI between $125k to $145k ($225k-$245k for
joint filers).
3. Has the credit amount been increased?
No. But the maximum credit amount is different depending on whether the taxpayer is a 1st-Time
or Non-1st-Time Homebuyer.
1. 1st-Time Homebuyers. Full credit is still $8,000* ($4,000 if married filing separately).
2. Long-Time Residents of Same Principal Residence. Full credit is $6,500* ($3,250 if married
filing separately).
You will get this money in the form of a Federal Tax Refund, just as always. Also, though it is still a
true credit, as opposed to a loan (recall the 2008 version), recapture or repayment would still be
required if you sold your home within 36 months of purchase.
* $8,000/$6,500 or 10% of purchase price, whichever is less. The 10% figure applies only when
the purchase price is less than $80,000/$65,000.
4. What housing qualifies as a Principal Residence purchase?
The date of purchase has been extended to July 1, 2010, so long as a binding P&S agreement
was executed (signed) by April 30, 2010.
As before, single family homes, condos, townhouses, and co-ops qualify so long as they are used
as the taxpayer’s principal residence. Homes purchased last year do not qualify for this program.
Also, sales between immediate family members are ineligible. It is also important to note that th
purchase price of the home cannot exceed $800,000.
Also, sales between immediate family members are ineligible.
This Q&A is intended to provide a quick overview. There are numerous other provisions in the
new credit, and homebuyers should understand them clearly before they make any decision
regarding their eligibility. Please review the more detailed information sheets on the MAR Home
Page.
Updated News
| Realty Investment Services |
---Four Things REALTORS® and Consumers Need to
Know About the New 2009 - 2010 Homebuyer Tax Credit
Extension – EFFECTIVE IMMEDIATELY!
Know About the New 2009 - 2010 Homebuyer Tax Credit
Extension – EFFECTIVE IMMEDIATELY!
--From "Massachusetts Association of Realtor"
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