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-   -   $7500 Tax Credit for First-Time Home Buyers (https://archive.immigrationvoice.org/forum/showthread.php?t=23382)

Michael chertoff 01-29-2009 10:04 AM

$7500 Tax Credit for First-Time Home Buyers
 
Friends,

we are eligible for this tax break or not? My tax guy is telling me that H1B visa holders are not eligible for this tax break.

Please share some info.

Thanks

MC

cooler 01-29-2009 10:13 AM

source of this information
 
Can you post the source for this information? A link would help..

fromnaija 01-29-2009 10:37 AM

Quote:

Originally Posted by Michael chertoff (Post 313662)
Friends,

we are eligible for this tax break or not? My tax guy is telling me that H1B visa holders are not eligible for this tax break.

Please share some info.

Thanks

MC

Your tax guy may not know what he is talking about. Consider firing him! As long as you have not filed your taxes as a nonresident alien, you are eligible for the credit. For tax purposes H1 visa holders are treated as resident alien, so where did he get his idea from?

va_dude 01-29-2009 10:41 AM

i agree. You should be able to use this tax credit. Go for it !!

-va_dude

ashkam 01-29-2009 10:46 AM

Here's the link.

Money quote : "Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible".

Also, there is an income limit.

quote : "For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000."

Also,

Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
You are a nonresident alien

h1techSlave 01-29-2009 11:04 AM

H1B is resident alien
 
It is my understanding that H1Bs are resident aliens. We are residing in this country, right?

Below is the complete list:
Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
* Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
* You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
* You stop using your home as your main home.
* You sell your home before the end of the year.
* You are a nonresident alien.
* You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.
* Your home financing comes from tax-exempt mortgage revenue bonds.
* You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.

Quote:

Originally Posted by ashkam (Post 313672)
Here's the link.

Money quote : "Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible".

Also, there is an income limit.

quote : "For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000."

Also,

Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
You are a nonresident alien


giveme_gc 01-29-2009 11:05 AM

Its a loan ..watch out
 
http://www.federalhousingtaxcredit.com/index.html

braindrain 01-29-2009 11:11 AM

Loan might change to credit in new stimulus
 
The 7500 is a 15 year interest free loan and thats certainly not bad. But, as part of the new stimulus plan, its being modified as credit rather than a loan and need to see if this makes the final cut.

sanjay 01-29-2009 11:12 AM

Quote:

Originally Posted by giveme_gc (Post 313678)

It's a loan and need to be re-paid in period of 15 years. Give me money now MAN, Who cares 15 years for repayment is a long time.

16. Does the credit have to be paid back to the government? If so, what are the payback provisions?

Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

inskrish 01-29-2009 11:18 AM

Quote:

Originally Posted by giveme_gc (Post 313678)

No. According to the new stimulus plan, the $7,500 tax-credit doesn't need to be repaid. It's free:-)

Source:http://money.cnn.com/2009/01/29/real...ion=2009012907

raysaikat 01-29-2009 11:29 AM

Quote:

Originally Posted by h1techSlave (Post 313677)
It is my understanding that H1Bs are resident aliens. We are residing in this country, right?

Below is the complete list:
Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if you buy a main home:
* Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
* You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
* You stop using your home as your main home.
* You sell your home before the end of the year.
* You are a nonresident alien.
* You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.
* Your home financing comes from tax-exempt mortgage revenue bonds.
* You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.

As a general rule, for tax purposes, an H1B holder is a "resident" (provided s/he meets the minimum presence rule and does not seek waiver due to his/her F-1 status, etc.). However, languages in the tax context do not include the word "alien". The word "alien" is almost exclusively used to refer to one's immigration status (not tax status) and in that context H1B holders are non-resident alien (as opposed to green card holders who are "resident alien"). So the tax consultant of the original poster may unfortunately be right.

Openarms 01-29-2009 12:08 PM

Tax Credit means that I can take loan of $7500 dollars from Federal Government even though I did not bought home yet and will think I buy home before June 2008??

radhay 01-29-2009 12:25 PM

IRS defines residency status per year based on "Substantial Presence" test. Tax man deserves to be fired. http://www.irs.gov/taxtopics/tc851.html

According to the text from House bill, the stimulus payment need not be repaid if you bought the house after Jan 1,2009. For houses bought in 2008 the repayment requirement is still present.

http://www.rules.house.gov/111/LegText/111_hr1_text.pdf (page 267). Hope the Senate will modify this to apply waiver for 2008 purchases also.

gcdreamer05 01-29-2009 12:54 PM

I dont understand how 7,500$ tax credit is gonna motivate people to buy homes which range anywhere above 120K to 400-800K...

This is way too less to motivate someone to take risk in this economy to go ahead and buy a house.

That being said something is better than nothing but i feel that the study that 10% sales will increase because of this is totally bogus, no one is gonna buy a house because they will get 7,500$ tax credit........ (looks like penny wise pound foolish)...

But ppl who have already made up their mind to buy a house will find this lucky n good for them.

h1techSlave 01-29-2009 01:05 PM

You are correct
 
You are correct. I also do not understand how a tax credit of $7500 is going to motivate a substantial number of people to buy a home. Also, there are too many strings attached to the whole thing.

I feel the home market will improve when:
The interest rate comes down to below 4%.
Job market improves
Infrastructure improves (roads, public transportation, broadband etc.)

Quote:

Originally Posted by gcdreamer05 (Post 313703)
I dont understand how 7,500$ tax credit is gonna motivate people to buy homes which range anywhere above 120K to 400-800K...

This is way too less to motivate someone to take risk in this economy to go ahead and buy a house.

That being said something is better than nothing but i feel that the study that 10% sales will increase because of this is totally bogus, no one is gonna buy a house because they will get 7,500$ tax credit........ (looks like penny wise pound foolish)...

But ppl who have already made up their mind to buy a house will find this lucky n good for them.



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