The Senate is hammering out details to extend and expand the homebuyer tax credit.  Once the Senate votes, it will move to the House of Representatives.

At present, the Senate’s version also seeks to eliminate fraud associated with the current home buyer tax credit.  See more here: homebuyer credit fraud.  Apparently, the IRS will be given additional authority to put a check on sham claims.  New measures to curb fraud when claiming the tax credit include:

Taxpayers must be 18 or older

A HUD-1 Settlement Statement must be included with tax-returns

Additional details on the block include:

Increase in the home purchase price to a max of $800,000.

Increase in income limits to $125,000.for those filing single returns and $250,000.for those filing joint returns.

Existing homeowners who have lived in their current home for at least 5 years will be eligible for up to $6,500. tax credit.

First time buyers are still eligible for a tax credit – It may be reduced to up to $6,500 from $8,000.

First-time or repeat buyers must sign a purchase contract on a new or existing home between 12-1-09 and 4-30-2010.  Closings must be completed no later than 6-30-2010.

The tax credit does not have to be repaid as long as eligible buyers live in the home as their principal residence for a minimum of 36 months.

To read more on the homebuyer credit set to expire on 11-30-09 visit: first time buyer tax credit.  In the meantime it will be interesting to see if the Senate version clears the House and becomes law.  Visit www.Bloomberg.com to monitor the progress.

Michelle A. Potter

Denver Realtor

RE/MAX Professionals

(303) 489-4035

Disclaimer: This is not intended to be tax or legal advice. Call your real estate attorney or tax representative with clarification and questions.