Back in March, I explained the existing homebuyer’s credit. I’m sure everyone read it, of course.
Well, my girlfriend happened to sell her house in April, 2010, and was able to buy a new property. So this morning, I found myself in a myriad of paperwork to get her credit.
First off, since she wanted the $6, 500 NOW , she decided she wanted to Amend her 2009 tax return rather than waiting for her 2010 tax return to be prepared, a really nice option since the IRS has indicated that since this is a refund of her 2009 taxes, she’ll get interest too!
Have you ever amended a tax return? Well, the IRS has now made a newer version of 1040X, the forms you use to amend your tax return. To do an amended return, you first have to redo your 1040 tax return. So, we prepared form 5405 being very careful to make sure we documented that she purchased the house in May 2010, and that even though it was AFTER the April 30, 2010 date for getting the credit, we had a Purchase and Sale document in April 2010 for the purchase.
We then went through the myriad of calculations on Form 5405 to come up with $6500 for the credit., but we were no where near done.
Then we had to take the ‘corrected totals’ from our ‘new’ tax return, and put that on Form 1040X, the amended tax return. Fortunately for us , we had a pretty good idea given all the press, of just what the bottom line is going to be i.e, we want the government to send us a check for $6500. What’s not so intuitive, is that we needed to show on the 1040X the $6500 as a ‘payment’ along with the $1400 Education Credit that we had included on her original return. But we got through it. I am an accountant, you know…and I’ve got pretty good software to make the job a little easier too.
So now we have this 1040X Amended return completed, and we have to attach her entire revised 1040 as well, so we have about 35 pages of paper, and yes it needs to be paper because the IRS won’t accept any returns for these credits via electronic means..apparently a little too much fraud…
The IRS wants my girlfriend to prove everything. So now we have to attach the TWO page SIGNED HUD statement, the 6 page SIGNED Purchase and Sale Agreement, and copies of her tax bills for the last 8 years. Since she didn’t have copies going back that far, she obtained a statement from her town that showed all her real estate taxes being paid. Lastly, her named had changed in the interim, so we had to include signed documentation helping establish that the name on her tax bills is the same person buying the property.
With luck, she’ll see her $6500 refund check in a couple of months.
Now, I prepared all this for her, but honestly, I have no idea how someone who doesn’t completely understand how the tax return system works would be able to do this. To claim this one credit, she mailed a 50 page document to the IRS.
If you qualify for this credit, and would like some help, we can do yours too.
Steven A. Feinberg – www.AppletreeBusiness.com – Get Appletree Blog via Email!
Filed under: Uncategorized Tagged: | homebuyer tax credit, income tax
