Response to Emma

Thanks to Emma for your question pertaining to the Federal Tax Credit for a home purchase (recent Housing Tax Act of 2008 passed on July 28th 2008);

Basically the idea is to stimulate housing sales…

The tax credit works as follows:

Who is eligible?

• Any individual or family that has not owned a home in the last three years, or never owned a home.
• Income (adjusted gross) limits are $75,000 for an individual and $150,000 for a couple.
• Must be a resident of the U.S.
• The home must be your principal residence.
• The purchase need take place after April 9, 2008 and before June 30 of 2009.

How it works:

• The IRS will cut up to $7500 in your tax bill in 2008 or 2009.
  Example: if you owe $4000 to the IRS on you4 08 tax, the $7500 credit would wipe out everything you owe plus get you a $3500 refund! If your tax bill is less than the credit amount…you get the difference back from the treasury.
  

Payback:

• This is like an interest free loan from the government…it is paid back over a 15 year period. For the $7500 credit…it is $500 per year.

For more information please check out www.federalhousingtaxcredit.com

Thanks for the question Emma…I hope this helps...

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