HOMEBUYER TAX CREDIT RECIPIENTS CAN'T E-FILE

Posted by Mai Ling at MSN Real Estate on Monday, Jan 25, 2010

It's not like I would ever say that free money isn't worth it, especially when it's a tax credit of up to $8,000. But I still doubt that first-time homebuyers who get their chunk of the housing kick-start are jumping for joy that they won't be able to e-file come April.

As if it's not hard enough filing the first year after buying a home, these taxpayers also have to send even more documents in to complete their 2009 taxes. The rest of us could very well be jumping for joy, though, because the push behind this new rule is due to the high number of suspicious claims for the tax credit, according to Move.com. I, for one, am 100% behind the Internal Revenue Service trying to catch those recipients who wrongfully took the money.

And for those of you who followed the rules, just remember, all you have to do is prove it. Your most important step is to fill out the new IRS Form 5405, "First-Time Homebuyer Credit and Repayment of the Credit," which also can be used by those who bought a home in 2008 and are amending their taxes for that year.

Elizabeth Razzi with the Washington Post sums up what else you'll need to send in:

Copy (keep your originals) of one of these documents to back up claim to the tax credit.

-- copy of your HUD-1 settlement statement, complete with dates and signed by all parties.

-- Mobile-home buyers can send in a copy of their signed, dated and fully executed sales contract.

-- New home buyers who don't have a HUD-1 settlement statement must send in a copy of the Certificate of Occupancy.

All of these documents need to show names, dates, addresses, signatures and prices.

And just because you can't e-file doesn't mean it's going to be all that much more difficult. You still can use the IRS's online tax preparation forms and software such as Turbo Tax; you just have to print it all out and mail it in.

For current homeowners who have patiently been waiting for more information about the $6,500 move-up credit, the Los Angeles Times notes that you also can use Form 5405 for either your 2009 or 2010 taxes and that the credit is "inelegantly dubbed the 'long-time resident of the same main home.'"

A note from Bartek Real Estate ---- CONSULT YOUR CPA FOR ASSISTANCE IN FILING FOR THIS TAX CREDIT.