First-time Home-Buyer Tax Credit Issues

A few points about the first-time home-buyer tax credit from our friends at NAEBA.  

No Electronic Filing for Home Buyers Claiming Home Buyer Tax Credit
National Association of Exclusive Buyer Agents (NAEBA) offers tips from IRS on filing for Home Buyer Tax Credit

AVONDALE, AZ April 15, 2010 – Electronic filing takes some of the stress out of tax day, but this year homeowners may be surprised to learn that if they are claiming the Home Buyer Tax Credit e-filing is not an option. Home buying experts, The National Association of Exclusive Buyer Agents (NAEBA) is urging homeowners to carefully review and follow the IRS guidelines to file for the credit, which include the requirement to print and mail a paper return.

“NAEBA exclusively represents buyers in real estate transactions and our advocacy does not end when the purchase is finalized. We advise home buyers on all the issues involved in a home purchase. Tax season can be stressful and confusing and we want to ease that burden by passing on information that is important to the market we serve,” says Benjamin Clark, 2010 President of NAEBA.

To qualify for the Home Buyer Tax Credit you must buy or enter into a binding contract to buy a principal residence on or before April 30, 2010 in the United States, and you must close on the home on or before June 30, 2010. According to the IRS the following steps must be taken to claim the credit:

File a Paper Return. You cannot e-file but must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit with additional documents to verify the purchase. You can digitally prepare your taxes using tax websites or software but must print and mail your return to the IRS with all required documentation.

Deadlines and Documents. If you enter into a binding contract before May 1, 2010 to purchase a home before July 1, 2010 and are claiming the credit, attach a copy of the pages from the signed binding contract that show all parties’ names and signatures, the purchase price, date of contract and the property address.

Settlement Documents. New homebuyers must attach a copy of a properly executed settlement statement, which will generally include property address, all parties’ names and signatures, sales price and date of purchase. Forms can vary by location and may not include both buyer and seller signatures. If your form does not require signatures on the settlement document, the IRS encourages buyers to sign the settlement statement when filing their tax return even if the form does not include a signature line.

Newly Constructed Homes. If you purchased a newly constructed home, where a settlement statement is not available, you must attach a copy of the certificate of occupancy showing the owners’ name(s), property address and date of the certificate.

Mobile Home Purchases. If you purchased a mobile home and are unable to obtain a settlement statement, attach a copy of the executed retail sales contract. The contract should have all parties’ names and signature, date of purchase, property address and purchase price.

Long-time Residents. For long-time resident homebuyers claiming the tax credit, the IRS recommends attaching documentation that covers the five-consecutive-year period. This may include documents such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner insurance records.

Homebuyers can find more information about the Home Buyer Tax credit on the IRS website at http://www.IRS.gov/recovery and can locate home buying resources and an Exclusive Buyer Agent at http://www.naeba.org.

 
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About NAEBA

The National Association of Exclusive Buyer Agents (NAEBA) is an organization of real estate professionals who have dedicated their business lives to representing only buyers of real estate. To avoid conflicts, NAEBA members do not list homes for sale and never represent sellers. This restriction to one side of the real estate transaction ensures that the interest of home buyers is protected in every step of the real estate transaction, from house-hunting and negotiation, to inspection, financing and closing.

NAEBA is pioneering a nationwide effort to give today’s home-buying consumers the level of service they deserve and are increasingly demanding. NAEBA members firmly believe that home buyers have the same full and equal representation rights as sellers in any real estate transaction. NAEBA, in existence since 1995, is comprised of Exclusive Buyers Agents in most areas of the United States, and in some international markets.
For more information, visit http://www.naeba.org.

Media Contact:
Kimberly Kahl, CAE, Executive Director
National Association of Exclusive Buyer Agents          
Phone:  800-786-1570
Email:   kkahl@naeba.info