$10,000 First Time Buyer Credit In California
With the federal first time buyer tax credit winding down, and many of my clients scrambling to get in escrow before April 30th, news of the California first time homebuyer tax credit came at the right time. There has been a lot of misinformation out there about who, what, when, and how people can qualify for this credit.
I wanted to take this blogging opportunity to quickly outline the most misunderstood elements of this credit:
1. The taxpayer/buyer can not have purchased a home, or have ownership interest in the 3 years preceding this purchase.
2. The tax credit must be applied over 3 years successively at a maximum amount of $3,333/year. Some people believe that they will get the entire credit in one year, and this is not true.
3. The taxpayer/buyer must remain in the home for a minimum of 2 years following the purchase.
4. The escrow must close after May 1, 2010. The buyer can enter into contract prior to this date, but the escrow closing has to be after May 1st. The good news here is that you could potentially take advantage of both tax credits if you can get in before April 30th.
I can’t stress enough that talking to your CPA is the best way to understand whether you qualify or not, but hopefully this helps! If you have any further questions, feel free to give us a call, or check out the Franchise Tax Board site for more detailed info.
