HOMEBUYER TAX CREDIT

Homebuyer Tax Credit

HOW THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 TAX CREDIT WORKS

*First time homebuyers who purchase a primary residence between January 1, 2009 and December 1, 2009 receive a tax credit equal to 10% of the purchase price.

*The credit is capped at $8,000.

*There is no repayment requirement provided the home is not sold for 3 years.

*The credit decreases as modified adjusted gross income rises about $150,000 for married couples ($75,000 for individuals) and disappears after $170,000 ($95,000 for individuals).

*Any single family residence that is used as a primary residence is eligible.

*First time homebuyer is anyone who has not owned a primary residence in the previous three years before the purchase.

EXTENSION OF THE TAX CREDIT

*Extends the deadline to April 30, 2010, but if there is a purchase agreement in place before April 30, 2010 the buyer has until June 30, 2010 to close.

*Tax credit is extended on a limited basis (up to $6,500) to individuals who have owned and used the same residence as their primary home for any 5 consecutive year period during the 8 year period ending on the date of purchase.

*Income limits are increased to $125,000 for individuals and $225,000 for married couples.

*Does not apply to homes with a sales price that exceeds $800,000.

*For property purchased in 2009, the credit may be claimed in tax year 2008 or 2009 (if closing took place after April 15, 2009 the taxpayer must request an extension for filing to claim the credit in 2008).

*The home must still remain the homebuyer's principal residence for 3 years or the credit must be repaid.

*IRS Form 5405 is used to claim the tax credit.

The credit is not available if the home is purchased from a close relative such as a spouse, parents, grandparent, chold or grandchild. Any homebuyer purchasing a primary residence using a home loan program connected with state-revenue bond funding is not eligible for the tax credit.

Any potentional homebuyers should consult a qualified accountant to determine if they meet all of the requirements of the new law and to insure that their application for the credit is reported correctly.

Crescent Title, LLC

Daniel M. Douglass

Attorny At Law

Crescent Title, LLC

Bergeron, Douglass, Frosch & Mack

3224 N. Turnbull Drive

Metairie, LA 70002

504-888-1919

504-888-1977 (fax)

www.CrescentTitle.com