2009 Home Purchase

Today TaxMama hears from Ray in Kansas who tells us. “My wife and I were first time home buyers on 08/20/09. We have been informed that if we amend our 2008 taxes, the first time home buyers credit will be treated as an interest-free loan that will have to be paid back. But if we claim it on our 2009 taxes it will not have to be paid back. Can you help clarify this question?”

TaxMama answers a question on Tax

Dear Ray,

Whoever you spoke to gave you ridiculous information.

If you bought a home this year, you get 10% of the purchase price, up to $8000 as a tax-free gift. It’s not a loan.

Yes, you may amend your 2008 tax return to get the refund – and it will still be tax-free. Not a loan.

Good thing you asked, though. I don’t advise you to amend your 2008 tax return. IRS is now taking about 20 weeks to process the amended returns.

You’ll get the money faster if you just file for it on your 2009 tax return. Be sure to file early.

For more information, watch for this month’s TaxWatch article on MarketWatch.com

And remember, you can find answers to all kinds of questions about the first time homebuyers credit and other tax issues, free. Where? Where else? At TaxMama.com.

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