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2009
FIRST-TIME HOME BUYER TAX CREDIT
1.
To qualify for the 2009 First-Time Home Buyer Tax Credit, a
home must be purchased in what time period?
Your Answer: Jan. 1, 2009-Dec. 31, 2009
Correct Answer: Jan. 1, 2009-Dec. 1, 2009
The home must be purchased on or after Jan. 1, 2009 and before
Dec. 1, 2009 to qualify.
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2.
In order to qualify for the full $8,000 tax credit, the house
must be at least what price?
Your
Answer Is Correct: $80,000
Any home that is purchased for $80,000 or more will qualify
for the full $8,000 credit. The credit is equal to 10 percent
of the home's purchase price, up to $8,000. So if the house
costs less than $80,000—say, $75,000—the credit will
be 10 percent of the cost (in this case, a $7,500 credit).
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3. A first-time home buyer is defined as a buyer who hasn't
owned a principal residence for how long?
Your Answer: Never owned a home
Correct Answer: 3 years prior to the purchase
A first-time home buyer is considered to be a purchaser who
has not owned a home in the three years previous to the day
of the 2009 purchase. So if the last time you owned a home was
in 2005, you would be eligible for the tax credit, even though
it's not technically your "first" home. Married joint
filers must both meet this "first-time home buyer"
requirement in order to claim the credit on a joint return.
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4.
What is the income limit for claiming the full tax credit for
married taxpayers filing a joint return?
Your
Answer Is Correct: $150,000
Married couples filing jointly cannot have an income of more
than $150,000 to qualify. If the couple makes more, they don't
lose out entirely, though. The credit phases out for married
couples (filing jointly) who earn $150,000 to $170,000 in annual
income, with a smaller credit being awarded for the higher amounts.
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5. What is the income limit for claiming the full tax credit
for a single taxpayer?
Your
Answer Is Correct: $75,000
Similar to married couples filing jointly, singles making more
than $75,000 in annual income don't necessarily lose out entirely
on the benefit of the credit. The credit phases out for single
filers earning between $75,000 and $95,000.
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6. How is a home buyer’s income determined for tax credit
eligibility?
Your Answer Is Correct: Adjusted Gross
Income (AGI)
For most individuals, “income” will be defined and
calculated as Adjusted Gross Income (AGI) on their IRS 1040
income tax return forms. AGI includes wages, salaries, interest
and dividends, pensions and retirement earnings, rental income,
and several other elements. AGI is the number that appears on
the bottom line of the front page of a 1040 form.
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7.
What is the most significant difference between this tax credit
and the one Congress approved in July 2008?
Your Answer: The credit is $5,000 higher than in 2008.
Correct Answer: The repayment feature is eliminated.
The 2008 home buyer tax credit that Congress approved was basically
an interest-free loan but it had to be repaid over 15 years,
whereas the 2009 tax credit does not have to be repaid. The
2008 tax credit also had a limit of $7,500.
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8. What types of homes do not qualify for the tax credit?
Your Answer Is Correct: They all qualify
Basically any home that is used as a principal residence qualifies
for the tax credit, including single-family houses, mobile homes,
townhouses, condos, manufactured homes and even houseboats.
Generally, you must spend 50 percent or more of your time in
the home for it to be considered a principal residence.
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9.
To claim the tax credit, you will need to:
Your Answer Is Correct: Claim it on your federal income tax
return.
It's that easy: Just claim it on your federal income tax return;
no pre-approval is necessary. Home buyers will need to complete
IRS Form 5405 to determine their credit amount and then claim
that amount on Line 69 of their 1040 income tax return.
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10.
Which of the following statements about the tax credit is TRUE?
Your Answer Is Correct: Vacation homes and rental properties
are not eligible.
The home must be a principal residence that is owned by the
occupant, so vacation homes and rentals would not be eligible
for the tax credit.
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11. What if buyers are eligible for an $8,000 credit, but their
entire income tax liability for the year is only $5,000?
Your Answer: They can claim it in 2010.
Correct Answer: They'll get a refund for $3,000.
Any credit amount unused will be refunded as a check to the
buyer. So the purchaser would receive the difference between
the $8,000 credit amount and the amount of tax liability (so
in the above case, a $3,000 refund).
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12.
How long do owners have to stay in their homes without having
to repay the tax credit?
Your Answer Is Correct: 3 years
The home cannot be sold until three years after the purchase,
or owners will be required to repay the tax credit. This is
to prevent buyers from flipping properties in order to cash
in on the credit.
  
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