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Time running out for first-time homebuyer’s tax credit

If you’re in the market for a new home and hope to take advantage of the first-time homebuyer tax credit, you’ll need to purchase a principal residence before May 1, 2010 (or before July 1, 2010 if you enter into a written binding contract prior to May 1, 2010). If you–and your spouse, if you’re married–did not own any other principal residence during the 3-year period ending on the date of purchase, the credit is worth up to $8,000 ($4,000 if you’re married and file separate returns). If you–and your spouse, if you’re married–have maintained the same principal residence for at least 5 consecutive years in the 8-year period ending at the time you purchase a new principal residence, the credit is worth up to $6,500 ($3,250 if you’re married and file separate returns).

The credit is reduced if your modified adjusted gross income (MAGI) exceeds $125,000 ($225,000 if married filing a joint return) and is completely eliminated if your MAGI reaches $145,000 ($245,000 if married filing a joint return). You can’t claim the first-time homebuyer tax credit if the purchase price of your principal residence exceeds $800,000. Other limitations and provisions also apply.

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