Taxation & Estate Planning

The $8,000 Income Tax Credit for First-Time Home Buyers: Primary Sources

By Joel A. Schoenmeyer

Hey, I like the internet as much as anyone (really!). But one problem I have is that there are very few places to turn in order to really understand an issue. A lot of the problem is reliance upon secondary sources. So, when my client asks, "can I take advantage of this new $8,000 credit for first-time homebuyers," I run across 100,000 websites providing a vague summary of the law. But I have actual, specific questions -- where is the ACTUAL law?

So, let me offer some links to primary sources on this issue:

1. The credit is found in the American Recovery and Reinvestment Act of 2009 (the "2009 Act"), which is here as a PDF. More specifically, it's in Section 1006 of the 2009 Act. The above PDF has 407 pages; Section 1006 is on pages 202-203.

2. The credit found in the 2009 Act is really just an extension of the $7,500 credit for first-time homebuyers found in the Housing and Economic Recovery Act of 2008 (the "2008 Act"), available here as a PDF. The credit is discussed in Section 3011 of the 2008 Act, found on pages 235-238 of this PDF (which has a total of 260 pages).

3. Both the 2008 Act and the 2009 Act amend the Internal Revenue Code (the "Code"), in large part by (essentially) creating a Section 36 to the Code. Here is a link to a new PDF of how Section 36 should now read, with the provisions of both Acts integrated into it. Deletions from or additions to Section 36 by the 2009 Act are indicated by a strikethrough or bolding, respectively.

4. You use Form 5405 to apply for the credit.

Full post as published by Death and Taxes Blog on July 02, 2009 (boomark / email).