BiggerPockets

You don't get a check. It is a credit against income taxes that you owe. So if you were to buy a home today you wouldn't see the full effect until tax time in 2010. Of course, if you have a regular job you could reduce your Federal withholding and have more take home pay each week

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Yes, if she meets all of the requirements. The taxes should definitely be done by a pro this year. It is called a credit but it is really an interest-free loan that must be paid back over a 15 year period of time.

:cool:

Rich, I'm sure your aware of the change in the 1st time buyer tax credit since your post. My partner and I were kicking this around today, give me your thoughts.
1. Can a first-time home buyer get the credit if they buy on land-contract. I have talked with CPAs who do not know what a land contract is. They probably will refer to it as seller-financing, owner-financing, and/or an installment sale.
2. Can a buyer who buys in 2009 file an amended 08 return to get the $8000 now?
3. What forms should be filed? It looks like 5405 revised Feb 09, and 1040X. Should we also file form 1099S to report the sale?
4. Do we need to record the land contract at the court-house to make this more audit proof?
5. After selling my house on land contract, can I continue to depreciate it (probably not)?
6. After selling on land contract, can I continue to write off the interest on my underlying loan?
7. If the land contract is recorded at the court house, does the buyer have to pay state transfer taxes?
8. What happens if the land contract buyers who have gotten the first time home buyers credit sell the house within 3 years?
9. What happens tax wise if I have to repossess the house (both my taxes and the buyers)?
I have attached the instructions for 1099S. On page 1 under "Sale or Exchange" it mentions a land contract. I also attached 5405 revised Feb 09. On part I, line C it has the option to select an 09 purchase to have occured in in 08. Also, on page 3 of 5405 under "purchase price" it talks about "notes given to the seller". Finally, I have also attached form 1040X, which has a specific paragraph on page 2 for "First time home-buyer credit". My interpretation of all of this is that yes, a land contract is considered a sale in the year that the land contract is signed (would be 09 for my case), and the buyer can apply for the tax credit by filing an amended 08 return.

Old Tax Credit $7500. Dollar for Dollar Tax write off on your 1040 against taxes owed. Can't file amended return. Your stuck and must pay it back over 15yrs.
New Tax Credit $8000. No payback required. It is not a rebate!! It can only be used to offset any Income Taxes owed. If the buyer is getting a refund they can adjust their withholding (W4) to reflect the percentage available each year-thus more money will show up in your paycheck.
Matt/Mathews Associates-Investment Advisor/Buyer Agent Specialist

Thanks Matt, I'm getting confused. I pulled this from http://www.federalhousingtaxcredit.com/2009/faq.php#3 and it seems to conflict with what your saying. Help me out .
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

That would seriously stink if you had to count the rebate as income on following years taxes. I would totally believe that though. Looks like the extension is going to pass again, http://www.realtor.org/press_room/news_releases/2009/11/extension_positive so thats good for all the buyers.