Homebuyer Tax Credit Extensions

It has been rumored that Congress might extend the extremely popular $8,000 tax credit to homebuyers past the December 1^st expiration date.

There is another tax credit of $8,000 on the horizon a year from now that will be available for some purchasers. This brings up the question of why not leave it in place for all first-time home buyers? Recently, Democrats have sponsored a bill that is their own version of a six-month extension, retaining the ceiling at $8,000 and targeting only first-time purchasers. "A six-month extension is a fiscally responsible way to provide adequate time to nudge even more prospective homebuyers off the sidelines," says Senator Benjamin Cardin (Democrat- Maryland). The estimates of the revenue costs of the current credit may vary widely between $3 billion and $8 billion or more.

On September 17^th a tax credit bill was introduced that is likely to quickly make its way through the House of Representatives and onto the Senate. The name of the bill is the Service Members Home Ownership Tax Act (H.R. 3590), which would extend the tax credit for 12 months for thousands of military, Foreign Service and Intelligence agency personnel who have been posted abroad during 2009. The tax credit would be set to expire November 30, 2010. This tax credit would be applicable to service members who had at least 90 days of overseas duty assignments during 2009, and who have otherwise met the eligibility tests for the credit. The bill would prevent the IRS from "recapturing" the $8,000 tax credit when service members are forced to sell or rent their houses because they are ordered to deploy to a different duty station, overseas or domestically.

Source: Harney, Kenneth R. "Homebuyer tax credit may live on." St.Petersburg Times 10 Oct. 2009. Print.