| Which Taxpayers are not "Eligible for the First-Time Homebuyer Tax Credit?"
According to the IRS, "Wealthy taxpayers don’t qualify for a first-time homebuyer tax credit. Credit phase out begins at $75,000 per individual or $150,000 for married filing jointly. The phase out is calculated on lines 2 through 5 of Form 5405. The credit is completely phased out for individuals who make $95,000 or more (or $170,000 for joint filers)."
Furthermore, in addition to taxpayers who exceed the income thresholds noted above, the IRS has identified the following taxpayers who would not be able to claim either credit if any of the following items apply as shown below;
a)The person is a non-resident living in the U.S. who does not meet the green card test or substantial presence test for the calendar year.
b)The purchased home is located outside of the U.S.
c)The home is sold or ceases to be the taxpayer’s primary residence before the end of 2008.
d)The home was inherited or a gift from someone else.
e)The home was purchased from a relative. This may include a spouse, parent, grandparent, children, and grandchildren.
For the $7,500 tax break only, the following individuals are also prohibited from claiming the credit:
a)Anyone who is currently or formerly was eligible to claim the District of Columbia first-time homebuyer tax credit.
b)The home purchase was financed with tax-exempt mortgage revenue bonds.
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