Military Homebuyers Credit

Today TaxMama hears from Gloria in the TaxQuips Forum who needs clarification. She says “Military members have almost two more years to use the $8,000 tax rebate. They must have been stationed or deployed overseas for 90 days during 2009 (approximately).

My question is whether the 90 days must be consecutive, or whether several short deployments to Afghanistan or Iraq, for example, that total at least 90 days is sufficient.”

Dear Gloria,

Hmm…I don’t know about two more years. But the military and certain other federal employees do have ONE extra year. They may open escrow or sign an offer to purchase until April 30, 2011 – and close the sale by June 30, 2011.
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 Now to your question about consecutive days.

Here’s what IRS says:

 Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

 So no, the days don’t have to be consecutive.  But you do have to be able to prove those 90 days – and may as well include copies of the buyers orders with the tax return when filing for the credit.

 Another interesting bit of information you may want to know. This is good to know. When a military home purchaser’s duty post is changed and they must sell the house due to the move (or are forced to move and don’t sell the house, but it no longer qualifies as their personal residence), they are not required to repay the homebuyers credit – even if the move takes place in the year of the purchase.

Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period. 

 I hope this helps you, Gloria.

And remember, you can find answers to all kinds of questions about military tax issues other tax issues, free.
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