Closing deadline for tax credit extended

WASHINGTON, D.C. - Eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April now have until Sept. 30 of this year to close the deal, the IRS has announced.The Homebuyer Assistance and Improvement Act of 2010, signed by President Obama on July 2, extended the closing deadline from June 30 to Sept. 30 for any eligible homebuyer who entered into a binding purchase contract on or before April 30. The new law addresses concerns that many homebuyers might be unable to meet the original June 30 closing deadline, the IRS said in a statement. The IRS also reminded taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit. To avoid refund delays, those who entered into a purchase contract on or before April 30, but closed after that date, should attach to their return a copy of the pages from the signed contract showing all parties' names and signatures if required by local law, the property address, the purchase price and the date of the contract. Besides filling our Form 5405, all eligible homebuyers must also include with their return one of the following documents: A copy of the settlement statement showing all parties' names and signatures if required by local law, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement. For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase. For a newly-constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner's name, property address and date of the certificate. Besides providing a tax benefit to first-time homebuyers and purchasers who haven't owned homes in recent years, the law allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence. More details on claiming the credit can be found at www.irs.gov.

********** Published: July 8, 2010 - Volume 9 - Issue 12