New First-time Homebuyer Credit Rule

July 22, 2010 – 3:19 pm

The Section 36 First-Time Homebuyer Credit applies to principal residence purchases occurring after 4/8/08 and before 5/1/10. Under current law, the purchase of a principal residence will qualify for the credit if the taxpayer entered into a binding written contract before 5/1/10 to close on the purchase by 7/1/10. Because of a backlog in closing these purchases, thousands of homebuyers risked losing the credit. So, on 6/30/10 the Senate passed the Homebuyer Assistance and Improvement Act of 2010 (H.R. 5623), which replaces “7/1/10″ with “10/1/10.” As a result, taxpayers who entered into a written binding contract prior to 5/1/10 will have until 9/30/10 to complete their home purchase. The House passed the Act on 6/29/10, so it now goes to the President for his signature.

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