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Purchase Offer Acceptance Deadline: April 30, 2010

Close of Escrow Deadline: June 30, 2010 (usually +60 days from the above date of offer acceptance)

The $8,000 Home Buyer Tax Credit summary per the American Recovery and Reinvestment Act of 2009.

• The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before May 1, 2010.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

FAQs:

1. What and when is the real deadline for this tax credit?
   There are a few dates to keep in mind when buying a house and the main two to make the deadline (April 30, 2009) realistic is the purchase offer acceptance date and close of escrow date. Let's breakdown each process in a couple bullets.

1. Purchase Offer Acceptance: You'll work with your Realtor (Samphors) to come up with a reasonable offer for the home of your dreams. Usually this will be equal to or greater than the seller's asking price or within reason of nearby comparable homes. This can be as quick as a week or as long as a month+ depending on the seller's Realtor acceptance speed. Foreclosed homes are usually quick about the purchase offer decision while short sales can take months or you'll never receive a response, so don't bother.
2. Acceptance and Escrow Process: Once your offer is accepted and all counter offers are signed, finalized and you submit your Earnest Money Deposit, usually $3000 or 3% of the purchase price, then escrow is on its way. The escrow, verification, documentation, underwriting, appraisal, inspection and loan funding, etc... will take on average 45 days from purchase acceptance.
3. Doing the math: 60 days to close escrow - June 30 = April 30, so you really have till April 30, 2010 to get your purchase offer accepted from the seller, then close escrow by June 30, 2009 or sooner.

2. Who is eligible to claim the tax credit?
   First-time home buyers purchasing any kind of home new or resale are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before April 30, 2010. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases.
   
   

3. What is the definition of a first-time home buyer?
   The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
   
   For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
   
   

4. How is the amount of the tax credit determined?
   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
   
   

5. Are there any income limits for claiming the tax credit?
   Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.