Friday, February 26, 2010

Tax Credit for Hawaii Kai 1st Time Buyers

The IRS has clarified documentation required by taxpayers to submit their claim for the tax credit as 1st time buyers and move-up buyers.

While the IRS is still requiring the filing of Form 5405, it will not be necessary for all parties’ signatures be on the HUD-1 settlement document, in areas where requiring both the buyer and the seller to sign the document isn’t common.

The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

If you want to use your tax credit, start looking at homes now. You must have an accepted contract by April 30. Contact me to help you fnd the Hawaii Kai home of your dreams.

Barbara Abe, Realtor

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