Here is a question about the second-time buyer tax credit that I was unsure of so I asked my friendly accountant, Shana Kemnitz for assistance. I hope that you may find this helpful.

My Tax Question:

I  have visited with a couple buyers who sold their homes in September 2009. I believe they are eligible for the second time buyer tax credit. Am I correct? Also I know two people having homes built. I’m thinking if they buy it from the builder completed, they would also qualify. Can you help me with those questions.

I do not see where it discusses what the maximum time gap is between selling your prior home and moving into a new one. The first question might be whether or not the sale of previous home needs to occur after enactment of the new legislation.

Shana’s Tax Answer:

For existing Homeowners: A taxpayer is eligible for a credit up to $6,500 ($3,250 if separate returns are filed) provided the taxpayer (and if married, the taxpayer’s spouse) has owned the same principal residence for any five consecutive years during the eight-year period ending on the date of purchase. This is effective for purchases after November 6, 2009. So, YES your buyers who sold in September 2009 may be eligible (credit phases out for joint return filers with an AGI of $225,000-245,000).

You do not have to sell the previous home. See the following research: “The homebuyer credit may be claimed by existing homeowners who are “long-time residents.” For purchases after November 6, 2009, you can claim the homebuyer credit if you (and, if married, your spouse) maintained the same principal residence for any 5-consecutive year period during the 8-years ending on the date that you buy the subsequent principal residence. For example, if you and your spouse are empty nesters who have lived in your suburban home for the past ten years, you are potentially eligible for the credit if you “move down” and buy a smaller townhome. There’s no requirement for your current home to be sold in order to qualify for a homebuyer credit on the replacement principal residence. Thus, the replacement residence can be bought to beat the new deadlines (explained above) before the old home is sold. For that matter, you can hold on to your prior principal residence in the hope of achieving a better selling price later on.”

I am still researching a specific answer on the new construction build. I will let you know when I get a specific answer. I would say YES the new builds qualify, but haven’t found the code to back me up yet.

Please let me know if you need anything else.