Year-end personal tax strategy: Lock in homebuyer’s credit — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Year-end personal tax strategy: Lock in homebuyer’s credit

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in Small Business Tax

The new housing law authorizes a tax credit for purchases by “first-time homebuyers.” For instance, a recently married child may qualify for the credit.

Strategy: Help your child buy a home. The child can claim a credit equal to the lesser of $7,500 or 10% of the purchase price.    

This new credit is available for homes bought after April 8, 2008, and before July 1, 2009. But be aware that the credit phases out for an AGI greater than $150,000 ($75,000 for single filers). Also, the credit must be repaid on the buyer’s tax returns over 15 years.

Tip: A first-time homebuyer is defined as anyone who has not owned a principal residence for the previous three years. So some older individuals might also qualify.

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