I hear there a way to have the tax credit use like down payment for second buyers (repeat buyer) how I have access to that money at front?
It is possible this and don't have to wait until you have to fill taxes?
thanks , jose

Hi Jose -
You don't get the money up front. The only way to claim the credit is to file an amended return for the prior year, or wait until the current year return is filed. The deal has to be closed before the credit can be claimed. The homebuyer will need to file Form 5405 with the tax return.

Yes , I know that but,why some "guru" claim that is possible to use that credit as down payment , even better got the $6,500 at closing... I think it's not possible that really I don't believe that , somebody it's making good $$$$ with the idea!!! aaarrrrrr "gurus" !!!!!

The key word is "CREDIT". As I understand it, it's a tax credit for the buyer, and they do not actually receive cash in hand.

Lynn (FL)

You're right about it being a "CREDIT" Lynn, but it is a REFUNDABLE credit. Any amount not applied to the taxes, IS refunded to the taxpayer. So let's say the taxpayer's 2008 return has been filed and he/she received a small refund. If he/she is eligible for the full $8K credit and files an amended return they WILL get a check from Uncle Sam in the amount of $8K. The credit is a refundable credit. If he/she chooses to file the credit on his/her 2009 return, the amount actually received will be determined on any tax liability still owed. No liability = Full credit. The credit would be reduced by any tax still owed. Make sense?

My recommendation is to, when possible, always file an amended return to get the full credit since the tax liability is generally paid and there is no tax to offset the credit.

The seller of the property should always run this by his/her tax pro. Failing to file one piece of paper could mean that he/she wouldn't get ANY of the cash even though it is all refunded to the buyer.

Regards!

Hi Lynn , I read on the IRS site about the Tax Credit and said it is totally refundable , It this mean the homeowner receive the money when he file the taxes ??? I think the Goberment are give that releive to the owner , but if he move or sale before 2 or 3 years it heve to be payd back...
I don't know but If there a way to use that money ? I think somebody are using that strategy , If work or no , I really don't know .
If you hear about Tim Mai , he is the one I talk about it...
If you can help me to get this clear it will be very helpful for me ...
thanks and Happy Holidays!!!!
Jose
vazjo64@gmail.com

Question , If I refinance my home in 2007 can I qualify for the return???



e t

No, a refinance does not qualify you for the Homebuyers' Tax Credit. To qualify for either the $8,000 first time home buyer credit, or the $6,500 credit for those who have owned a home for five consecutive years out of the previous eight and are now "moving up" requires the purchase of a new primary residence.

I personally know John Hyre, the attorney & accountant who did this seminar. He's legit and this is the best mini-seminar / ebook that you can buy on the first time home buyers tax credit. 

http://www.regoddess.com/seminars/JohnHyre09.asp

Yes, you can get that $6500-$8000 up front, sent to you as the investor, as a down payment on a contract for deed / owner finance deal.

John charges $250 to do all the paperwork and tax filing for you.  

It seems, based on my answer that you cannot get the money "up front," that this may be directed at me :-) Notice that I didn't say you couldn't get the money. I only said you cannot get it "up front." By that, I mean that you cannot get it at the closing. The deal MUST be closed before the buyer can apply to the IRS to get the credit.

I'm pretty sure that I listened to the same seminar that you reference below, and nowhere does John say that you can get the money at closing. In fact, you say yourself that John will do "the paperwork and tax filing." That tax filing is the same filing I'm referring to when I say that you will need to amend your return or file a 5405 to claim the credit. Since you know John, you may want to verify this with him, and feel free to have him correct me if I misconstrued what he said.

Let me say too, that the money CANNOT be sent to "you as the investor." The refund check will always be in the name of the buyer/taxpayer. He/she could have the check sent to a designee, but I strongly recommend that it NOT be you.

I would encourage any of you wanting to turn your "tenants" into "owners" by taking advantage of the Home Buyers Tax Credit to run your deal by your own tax pro. They should be able to help you structure your deal properly. If they can't, I suggest you find a new tax person.

But that's just me :-)

bwalston,

You are absolutely correct in everything you say above. I guess I didn't understand the questions being asked. 

Yes, you have to close on the sale before applying for the credit. Yes, the check from the IRS will be made out to the buyer. Then the check will be sent to the CPA/Attorney, who should then send it to you, which then you take to to the buyer to sign over to you.

I meant you get the money "up front", within a couple months after closing, before the buyer gets their permanent financing in 1-3 years. 

John Hyre has done over 100 of these over the last few months and has not had one rejected or had any problems with the IRS. You have to do it right.    

Not a problem my friend. Jose asked if he could "get the money upfront" and not "wait to file the taxes." That's the question that I was responding to. And you are absolutely correct in that you "have to do it right." Too many investors don't.

Happy new year!

Yeah seriously there are all these different rules for first time home buyers and second time home buyers. It can get really confusing. I'm glad I got to claim the tax credit for the first time home buyer this time around.