First-Time Homebuyer Credit Has Run Out and Buyers Have Less Than One Month to Qualify for a Federal Tax Credit

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According to Hall & Company CPAs, Inc. of Irvine, California, expert tax advisors, the California first-time homebuyer credit has run out and buyers have less than one month to qualify for a federal tax credit. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. First-time homebuyers need to purchase and close the escrow between January 1, 2009 and November 30, 2009 in order to claim the credit on their 2008 or 2009 tax return.

Irvine, CA (PRWEB) October 6, 2009 -- According to Hall & Company CPAs, Inc. of Irvine, California, expert tax advisors, the California first-time homebuyer credit has run out and buyers have less than one month to qualify for a federal tax credit.

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. First-time homebuyers need to purchase and close the escrow between January 1, 2009 and November 30, 2009 in order to claim the credit on their 2008 or 2009 tax return. As such, those planning to take advantage of this credit must act now in making a home purchase or be out of luck!

Federal Credits-Where's the money?

The 2009 first-time homebuyer tax credit provides a refundable credit of 10 percent of the home's purchase price, up to a maximum tax credit of $8,000.

Dollar Amounts of the Homebuyer Tax Credit

For 2008, the maximum tax credit is $7,500 or $3,750 for married couples filing separate returns. The tax credit is also limited to a $7,500 maximum for unmarried persons who purchase a residence together. For 2009, the maximum credit is $8,000 or $4,000 for married couples filing separately. If two or more unmarried taxpayers purchase a home together, their aggregate first-time homebuyer credit cannot exceed the applicable maximum amount. The tax credit may be allocated among the taxpayers using any reasonable method.

Qualifying as a First-Time Homebuyer

For the purpose of this tax credit, a first-time homebuyer is defined as someone who has not owned a primary residence in the three-year period ending on the date of purchasing the home. Married couples are considered first-time buyers if neither spouse has owned a residence in the previous three years.

For homes purchased in 2008, the tax credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year. This first-time homebuyer credit can only be taken on a 2008 tax return.

For information about these and other tax laws, interested parties should contact Hall & Company CPAs, Certified Public Accountants, Inc. at 949-910-HALL (4255) or contact bh@hallcpas.com.

Hall & Company CPAs, Inc.
Based in Irvine, California, Hall & Company CPAs, Inc. is an accounting firm that advises its clients on matters ranging from the traditional accounting and tax compliance services to consulting advisory services. Hall & Company focuses on building business value for owners and executives of companies in a wide array of industries.

About Bradford Hall, CPA
As the managing director of the Hall & Company, Bradford Hall is actively involved in all aspects of taxation and business planning. He has nearly 30 years of experience in public accounting. Hall's core strengths are in the areas of strategic tax planning for high-net-worth individuals, including corporate owners and executives, closely held corporations, partnerships, LLCs and trusts. He has significant experience negotiating corporate sales/merger, acquisitions and divisional spin-offs. In addition, Hall spends a great deal of time consulting in the area of business management, business succession planning, estate planning and preparation of comprehensive personal financial plans. He represents clients before the IRS, FTB and other taxing authorities.

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Alli Suever
Hall & Company
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