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You are here: Home / First Time Home Buyer Michigan / Would my Retired Parents qualify for the $8,000 Home Tax Credit?

Would my Retired Parents qualify for the $8,000 Home Tax Credit?

March 15, 2010 by admin  
Filed under First Time Home Buyer Michigan

2 Comments

My parents have been renting for the past several years. According to the documentation we’ve read regarding this new tax credit, they qualify as first time home buyers since they have not owned a home in the past three years.

They would like to purchase a small home in their home state of Michigan. I’m excited for them to own something again & this credit would be a real help to them.

My questions is since they are retired, they no longer pay taxes. So how would they receive this credit?

Are there special forms for them to complete?

Thanks for any advice!

Dear Vegas: Yea, go get the money. They can either file a return for 2008 (after they purchase a home) although not required to file and include form 5405 or wait until next year and claim the credit then. They must close on the house by Nov 30 2009 and the credit us 10% of the purchase price not to exceed $8000 and it does not have to be paid back. If they buy closer to Nov. they could wait until next Jan and efile and get their money quick. See IRS form 5405 instructions.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor

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Comments

2 Responses to “Would my Retired Parents qualify for the $8,000 Home Tax Credit?”
  1. bostonianinmo says:
    March 15, 2010 at 5:06 pm

    They’d file a tax return, attach Form 5405 to it, and claim the credit. Being retired doesn’t affect their liability, nor does how they pay for it. They can pay cash and still are eligible for the credit as long as they meet the 3 year rule and their income is below the cutoff of $170,000 in 2008.
    References :

  2. hrblockerrolquinn says:
    March 15, 2010 at 5:30 pm

    Dear Vegas: Yea, go get the money. They can either file a return for 2008 (after they purchase a home) although not required to file and include form 5405 or wait until next year and claim the credit then. They must close on the house by Nov 30 2009 and the credit us 10% of the purchase price not to exceed $8000 and it does not have to be paid back. If they buy closer to Nov. they could wait until next Jan and efile and get their money quick. See IRS form 5405 instructions.

    This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
    References :

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