First Time Homebuyer Credit - Helpful Hints

If you're planning on claiming the First Time Homebuyer Credit when filing your 2010 tax return, there a few things to keep in mind:

• You must have purchased or entered into a contract to purchase your home by April 30, 2010.
• The definition of a first time homebuyer is you did not own a principal residence for three years prior to the date of purchase.
• The definition of a long term resident homebuyer is you must have lived in the same principal residence for five consecutive years during the eight year period prior the purchase date.
• The maximum credit for the first time homebuyer is $8,000, or $4,000 for individuals who are married filing separate.
• The maximum credit for the long term resident homebuyer is $6,500, or $3,250 for individuals who are married filing separate.
• Claiming the credits will require that you file a paper return, along with Form 5405 and supporting documents, such as properly executed settlement statement, copy of dated certificate of occupancy for new construction homes or retail sales contract for a mobile home purchase.
• In the case of the long term resident credit, it is suggested you attach copies of Form 1098, Mortgage Interest Statement and/or property tax records.

NOTE:  Members of the military have an extra year to purchase a qualifying residence.