First time home buyers – Combine the $8k & $10k tax credits

by sfishome on March 26, 2010

It appears that some first time home buyers, if they time their purchases right, can qualify for both the Federal $8,000 tax credit AND the new California State $10,000 tax credit.

The federal tax credit has income limitations, the California tax credit does not.  You must meet both criteria, so default to the most stringent tax credit rules in order to qualify for both.  So for income, Single filers with income below $150,000. Married filing jointly income up to $225,000. (alert – you must run all of the info in this article by a tax professional or CPA before relying on it, I am not a CPA and this is not tax advice).

Federal says the home must be $800,000 or less.
First time home buyer means no principal residence ownership in the preceding 3 years for both tax credits. 

Now the timing trick.  If you enter into a contract by April 30th and close by June 30th you qualify for the Federal $8,000 tax credit. For the California tax credit you must Close on the home on May 1st or later.

So first time home buyers – if you meet all criteria (again, run this by a CPA) that is 35 days to find a home and enter into contract.

Your CPA can tell you what that means for your tax situation. Call them first, then call your Realtor – or call us if you’re not working with one yet.

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