The IRS has issued guidance that spells out the revised income limits for homebuyers claiming credits: Your modified adjusted gross income must be $125,000 or less if you are single, $225,000 or less if you are married filing jointly. Above these limits the allowable credit amount begins to phase does in increments, and is eliminated completely once incomes hit $145,000 for singles and $245,000 for married joint filers.
There are pitfalls as well: An advisory posted by the IRS earlier in the month spelled out situations where recipients of tax credits may have to repay them to the government. These include tax payers who sell their houses within a 36-month period after purchase. Recipients must also repay the credit if they convert their principal residence to a rental or business property, or if their lender forecloses on the house. Before making any buying decision, have your legal/tax advisor verify the most current rules.
Thank goodness they gave some light onto this. I have friends who keep asking me questions because they just don’t read the fine print!
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