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18Jun, 09

On May 20, 2009, U.S. Senator Johnny Isakson, R-GA., introduced legislation designed to stimulate residential real estate sales by expanding the first-time homebuyer tax credit which was passed by Congress earlier this year (discussed in earlier articles at this site).

The legislation seeks to increase the maximum amount of the tax credit from $8,000 to $15,000. More importantly, it would make the credit available to any buyer, not just those purchasing for the first time. The income phase-out would also be eliminated. Under the current legislation, in order to be eligible for the tax credit a single taxpayer must have a modified adjusted gross income of less than $75,000 ($150,000 for married couples filing a joint return). In addition, the proposed legislation would extend the tax credit, which is currently set to expire at the end of 2009, to June 10, 2010. Finally, the proposed legislation would allow homebuyers to claim the credit on their 2009 tax return for purchases made in 2010, either through a return filed on extension or an amended return.

Although there is widespread support in the Senate for Isakson’s amendment, similar legislation proposed by Isakson on Feb. 4, 2009, was passed unanimously by the Senate only to be removed during conference negotiations between the House and Senate on the final version of the bill. One provision of the earlier proposal which would allow the credit to be used as cash at the closing, is not included in the new proposal.

Joseph W. Kenny is a director and shareholder of Hamblett & Kerrigan, P.A. and practices in the areas of estate planning and taxation. He is also a Certified Public Accountant with certification as a Personal Financial Specialist. You can reach Attorney Kenny by email at jkenny@hamker.com.