00 First Time Home Buyer Tax Credit Lost By One Day
Q: I purchased a condominium in November, 2009 because I knew I would qualify for the first-time home buyer tax credit.
I was originally supposed to get a portion of the credit because of my income. However, when I read the IRS form, I saw that after November 6, 2009, the income level available for the first-time home buyer tax credit changed.
Can you believe I closed escrow on November 6, 2009, the day the income limits went up to $125,000 for individuals and $225,000 for married couples?
I went to your website and understand from the columns you’ve written that the change went into effect after November 6. If I had known that, I would have obviously waited to close the following Monday (on November 9) to get the full $8000.
Is there any appeal process with the IRS that would allow me to fight for the full amount since I closed on the day President Obama signed the tax credit extension and expansion?
What about an appeal based on the actual time he signed the legislation and when it closed on the west coast?
I don’t see how it’s fair to introduce new rules when someone is in the process, especially when it comes down to minutes. To miss this money by a few hours has been a struggle to swallow and anything you can offer is greatly appreciated!
A: I’m so sorry that you won’t be able to take full advantage of the $8,000 first-time home buyer tax credit. Unfortunately, Friday November 6, 2009 was the last weekday that in which the old rules for first time home buyers was in effect. On that day, if your adjusted gross income was over $75,000 if you were single or $125,000 if you were married, you started to phase out of the tax credit. And if your adjusted gross income was $95,000 if you were single or $145,000 if you were married, you didn’t get any tax benefit at all.
However, on Monday, November 9, 2009, the income limits rose to $125,000 if single and $225,000, if married, and phased out just about those amounts.
What a tough break. But the rules are quite specific in the new law, and the IRS is not hearing any appeals on this that I know of.
You also should know that we have received numerous letters where buyers have been unable to get the tax credit either because they recently got married and one of the two newlyweds does not qualify for the tax credit. There are other taxpayers who are just shy of qualifying because they don’t meet the deadlines of having owned at least five years for the repeat home buyer tax credit or have owned a home within the last three years.
Please contact a tax preparer for more details.