8000 Good Reasons ...

to buy and close on a home before November 30, 2009, if you, or anyone you know, is a first time home buyer or haven't owned a home in the last 3 years.  The new American Recovery and Reinvestment Act provides for up to an $8000 tax credit if you are a first time home buyer or haven't owned a home in the past 3 years, and have a "modified adjusted gross income" (MAGI) of up to $75,000 for a single taxpayer, or up to $150,000 for married taxpayers filing a joint return.  The IRS has a strict definition for MAGI and we strongly advise you to talk to your tax advisor or preparer to help you determine what your MAGI is. The applicable tax credit is equal to 10% of the purchase price of the house  up to a maximum of $8,000.  The available tax credit decreases if your MAGI is above the $75,000/$150,000 limits so you must to talk to a mortgage broker to determination what tax credit, if any, you would be eligible for. The incentive is a true tax credit that does not have to be repayed as long as the house is your principal residence and you have live in the house for at least 3 continuous years.

As with anything else, except giving billions to banks without any restrictions or direction on what to do with the money, this program has a lot of ifs, ands or buts, and we cannot urge too strongly that you talk about the program with both your tax advisor and a mortgage broker.  Do not make any decisions about buying a home without knowing all the pertinants facts.

One last note, if you fall into one of the qualifying categories and have closed on a home after January 1, 2009, run, don't walk, to your tax advisor to determine if you are eligilbe for a tax credit under the provisions of the American Recovery and Reinvestment Act.  Also, if you contracted for a home in 2008 but closed on it after January 1, 2009, and have already applied for the previous $7500 home buyers incentive, talk to your tax advsior about filing an amended Form1040X.