IRS offers guidance on new $6,500 tax credit for repeat home buyers

here' the action messag Kids Bounce House to potenti tax-credit seekers: Speed up your search for the hous you want to buy. Get moving. There ar onli 14 week to sign a contract and just five month to go to closingWith all the rule now available..

500 feder tax credit for repeat home purchases,If you'v been hold back on get involv with the new $6. there' no more excus for inaction. You now have all the offici IRS guidanc you'll need to bui a house, qualifi for the credit and pocket the $6,500.

with kei detail for taxpay that had been miss sinc Presid Obama sign the legisl creat the program Nov. 6. That' becaus the Internal Revenu Servic final publish the rule for the repeat-purchas credit.

the IRS post it revis Form 5405 on it Web site,On Jan. 15. http://irs.gov, six week after warn taxpay not to file claim for the $6,500 credit without us the revis form and new instructions.

000 credit for first-tim purchasers. Owner of exist home -- specifically,The credit -- inelegantli describ by the IRS as credit for the "long-tim resid of the same main home" -- supplement the popular $8. taxpay who have occupi the same properti as a princip resid for five consecut year dure the previou eight year -- mai now be abl to claim a tax credit on a purchas of anoth hous thei intend to us as a princip residence.

cap at $6,The credit is for up to 10 percent of the price of the replac home.500. The purchas contract must be date from Nov. 7, 2009, to April 30, and the close must occur no later than June 30. Member of the arm forc and feder diplomat and intellig personnel station oversea get an extra year to claim the credit.

000. Purchas ar not requir to sell their previou home,The maximum purchas price on hous elig for the credit is $800. but thei must be abl to demonstr that the replac hous is or will be their princip residence.

the IRS describ what document home buyer must submit with their $6,The new IRS guidanc answer kei question that had arisen from the vagu languag in the legislation. For example.500 credit claim. On 2009 and 2010 tax returns, buyer should attach the following:

includ the contract sale price and the date of closing. Thi is to document that the time of the transact meet the program' requirements. -- A copi of the sign HUD-1 settlement sheet.

homeowner' insur record or IRS Form 1098 mortgag interest statement for the five-year period. -- Evidenc of long-term ownership and occup of the previou hous to meet the five-consecutive-year requirement. Thi can be properti tax records.

for which a HUD-1 settlement sheet is not available,-- For buyer claim a credit on a newli construct home. the IRS will accept a copi of the certif of occup show the purchasers' names, the properti address and the date.

the IRS will accept a copi of the execut retail sale contract show the property' address,-- For buyer of mobil home who ar not abl to get a settlement statement. purchas price and date of purchase.

000 credit. Among these were fictiti home purchas in which taxpay or tax prepar sought -- or obtain -- credit on properti that never were sold or bought. Thi time around,Congress mandat all thi extra document after audit uncov widespread abus by applic for the $8. the IRS sai it will rigor investig all claim filed, start with a review of the document submitted.

000 or less if you ar single,The new IRS guidanc also spell out the revis incom limit for home buyer claim credits: Your modifi adjust gross incom must be $125. $225,000 or less if you ar marri and file jointly. Above these limits, the allow credit amount begin to phase down in increment and is elimin onc incom hit $145,000 for singl and $245,000 for marri joint filers.

or if their lender foreclos on the house. There ar pitfal as well: An advisori post by the IRS thi month spell out situat in which recipi of tax credit mai have to repai them to the government. These includ taxpay who sell their hous within 36 month after purchase. Recipi must also repai the credit if thei convert their princip resid to a rental or busi property.