Did the recently passed stiumulus bill provide for an $8000.00 credit instead of the former $7500.00 credit for first time homebuyers? I am only getting a credit of $7500.00 for one of our clients when I plug in the info.
1) Yes, curse those Congresspeople.
2) Wait for the forms to be updated. Acts of Congress do not magically transmogrify themselves into filing-ready forms.
The $8,000 credit is for home purchases from 1/1/09-11/30/09 but may be claimed on the 2008 tax return. IRS has (just) updated Form 5405 but it is not in Lacerte yet. 2008 purchases are only eligible for $7,500.
Does the new law waive the payback of the credit for "2008" purchases? The literature indicates that the recapture of the credit is waived for purchases "after 12-31-08." Looks like the taxpayer is being penalized for purchasing the home too early.
When did a 15 year interest free loan become a "penalty" because someone else got closer to the hog trough?
2008 purchasers have to repay the credit. 2009 purchasers don't unless they dispose of the property within 36 months of purchase.
Anytime anyone else gets closer to the hog trough, it's perceived as a penalty by them who are now a bit farther away. When I'm King of the World, there will be no social engineering via tax return. :)
The master IRS page with links to details is here:
Think of it this way: one of my poorest clients took money out of his 401K, his IRA, and everything he had, to get a high-rate mortgage and purchase his first home in May 2007. If only there had been a bill like the 2008 bill, applying to 2007, he wouldn't be owing IRS $7000-odd today. He'll manage to pay off IRS, but he surely could have used that first-time homebuyer credit, even if it were only a cash-flow-saver. It would have saved his paying the IRS all the interest on his installment agreement. So whoever can get the 2008 interest-free loan, more power to them.
does a mobile home that in most states is considered personal property, that sits on a rented lot in a mobile home park count as a permanent residence ?
Yes. Consider reading Pub. 523 for more info. I'm assuming you mean for tax purposes (such as mortgage interest deduction, home sale, etc.). For that purpose a house, a "Co-op" apartment, condominium, mobile home and even a houseboat may be considered principal or second residences, of course providing all the other rules apply.
I do have a couple rather perturbed clients, that they have to pay back their first time homebuyer credit and had they known they would have waited for the one they didn't have to pay back! But still, it did help cash flow at the time, and it IS an interest free loan...it just stings them paying it back when others don't have to, I understand, it's human nature. I just say "don't shoot the messenger" lol. Many taxpayers are assuming they don't have to pay back, because of the newer credit....unfortunately not so!
That's life, I guess. Imagine if you had the settlement date on December 30, 2008, and you had an option to move it to January 3, 2009. Ouch!
This is all kind of weird because I posted this question in February of 2009!
Cause Angel decided to add her comments, which are quite reasonable at this time, about the 2008 purchase credits payback, which begins now.
;-)....you got it Mr. Accountant Man! Just happened across this, and thought I'd put in my "2 cents" since it's happening now. I wonder when "old" questions are finally deleted from this forum, sometimes I forget to even look at the date.
And I still say, pity my poor client who bought his home in 2007. By the way, when he finally managed to pay off his IRS installment agreement, they noticed he still owed his state, so his '09 overpayment went to the state, not to him. I'm sure he'd have been so happy to be in the shoes of any of your clients. You can tell your clients my client's sad tale of woe, if it will make them feel any better.
