Tax Tips for Joint Home Ownership

by admin on February 9, 2011

Introduction

I just love tax.  Who was it that said the tax tail shouldn’t wag the dog?   Of course the dog should wag its tail, and not the other way round.  BUT let’s get real.  Who wants some tax tips for joint home ownership?  WE ALL DO.  Of course. 

Up to $8000 at stake !

Someone emailed me a few weeks ago asking how do I figure home tax for new home in Florida, someone else asked me about the 2009 housing tax credit and the 2009 energy tax credit.  Here’s some explanation of the terms below.

Home ownership tax credit – EXPLAINED – Q&A !

What’s all this about the new home buyer tax credit? First off, sorry !  this tax credit has now expired – it was only allowed from Jan 1 2009 and Dec 1 2009.  So if you are reading it now, you’re too late.  Here’s a Q&A in any case:

Q. Do first time home buyers tax credit 8000 ? 

A. The rules stated that new home buyers, defined as someone who hasn’t bought within the last 3 years, can claim a tax credit of UP TO $8000. 

Q. What about the 6500 new home tax credit  ?

A. The tax credit is actually 10% of the purchase price up to a $8000 cap.  So if you are buying a condo for $65,000, then there will be a 6500 new home tax credit .

Q. Do both husband and wife have to be first time buyers?

A. Yes. However, in the case of non-married couples, only one has to be a first time buyer.

Q. How long before I receive my 8000 new home buyer tax credit check? 

A. You receive this on your next IRS tax return.  It is refundable which means you will get a cash refund from the IRS even if you don’t pay that much tax.  This is particularly important as the average first time buyer only has a tax liability of $5000. 

Other info:

-          40% of home buying market are first time buyers

-          All types of homes qualify, new or second hand, any size.  Investor buyers don’t qualify, only.  Vacation homes aren’t necessarily disqualified.

-          Subject to income limits $150,000 modified adjusted gross income or $75,000 for single buyers.  There is a sliding scale for people who earn over these amounts.  Over $170,000 however you don’t qualify.

This YouTube video explains the 2009 housing tax credit:

Tax credit for energy saving

This section tells you have to apply for your energy saving tax credit

Firstly, it’s subject to a $1500 maximum rebate.

Here’s a list of some of the home improvements that qualify: Sky lights, insulation, storm roofs,  geothermal heat pumps, hot water boilers, advanced main air circulation,  biomass fuel stoves with thermal efficiency rating of 75% or more, ashfelt roofs with cooling granules.  There are others.

You get a 30% credit towards the cost of any of these improvements.  Subject to a $1500 maximum.

You will need to fill out IRS Form 5695 Residential Energy Credit.  For more details, check out this YouTube video.

Low income housing tax credit program fraud

Don’t ask me about low income housing tax credit program fraud, I’m sure it’s possible, and if you read the text above, I’m sure there are some loopholes.  But fraud is fraud, so don’t do it!  It’s definitely not something this website is going to condone.

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