First Time Home Buyer Credit
Wray Rives, CPA
www.rives.org

In 2008, Congress passed the First-Time Homebuyer
Provisions to offer tax credits as an incentive to home
buyers. The 2009 American Recovery and
Reinvestment Act modified and expanded the
provisions of the 2008 act.
This presentation will compare and contrast the
highlights of the two acts to provide guidance to first
time homebuyers who may qualify for this tax credit.
Wray Rives, CPA www.rives.org

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
Effective for purchases from Effective for purchases from
Apr 9 - Dec 31, 2008 Jan 1 - Nov 30, 2009
Credit equal to 10% of the Credit equal to 10% of the
purchase price up to $7,500 purchase price up to $8,000
or $3,750 for married or $4,000 for married
couples filing separately couples filing separately

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
Not eligible if DC No restriction regarding DC
homebuyer credit was or is homebuyer credit
available No restriction regarding
financing source
Not eligible if financed using
tax exempt mortgage
revenue bonds

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
Not eligible if home is Not eligible if home is
disposed of or ceases to be disposed of or ceases to be
the taxpayer's primary the taxpayer's primary
residence during the year of residence during the year of
purchase purchase
Nonresident aliens may not Nonresident aliens may not
claim the credit claim the credit

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
15 year re-payment period No repayment provision.
beginning in 2010. 1/15 of
credit is repaid each year
until 2025.
Repayment ceases upon
death of taxpayer.

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
If home is sold or is no If home is sold or is no
longer principal residence longer principal residence
before the end of 15 year within 36 months of
recapture period, immediate purchase, immediate
recapture of remaining recapture of entire credit is
credit is triggered on the tax triggered.
return in the year of
disposition.

Wray Rives, CPA www.rives.org
2008 Act 2009 Act
Recapture Exceptions: Recapture Exceptions:
-Death -Death
-Divorce -Divorce
-Involuntary conversion -Involuntary conversion

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2008 Act 2009 Act
Phase Out Phase Out
Credit phases out for Credit phases out for
taxpayers with modified taxpayers with modified
adjusted gross income adjusted gross income
between $75,000 and between $75,000 and
$95,000 $95,000
($150,000-$170,000 for joint ($150,000-$170,000 for joint
returns) returns)

Wray Rives, CPA www.rives.org
Taxpayers claim the credit on form 5405. Anyone who
qualifies, but failed to claim the credit in 2008 can file an
amended return. The credit for homes purchased in 2009
can be claimed on either the 2008 or 2009 return.

Wray Rives, CPA
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