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Tax Season and VA Loans

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If you are a homeowner, you may qualify for several tax breaks. Check out the following facts to see if you qualify, as well as part 1 in this series.

First Time Home Buyer Credit

Generally, the credit is the smaller of:

  • $8,000 ($4,000 if married filing separately), or
  • 10% of the purchase price of the home.

You are considered a first-time homebuyer if you meet all of the following requirements.

  • You (or your spouse if married) are, or were, a member of the uniformed services or Foreign Service or an employee of the intelligence community
  • You purchased your main home located in the United States:
    • After December 31, 2010, and before May 1, 2011, or
    • After April 30, 2011, and before July 1, 2011, if you entered into a binding contract before May 1, 2011, to purchase the home before July 1, 2011.
  • You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase.

Long-time resident of the same main home

Generally, the credit is the smaller of:

  • $6,500 ($3,250 if married filing separately), or
  • 10% of the purchase price of the home.

You are considered a long-time resident of the same main home if you meet all of the following requirements.

  • You (or your spouse if married) are, or were, a member of the uniformed services or Foreign Service or an employee of the intelligence community
  • You (and your spouse if married) previously owned and used the same main home as your main home for any 5-consecutive-year period during the 8-year period ending on the date you purchased your new main home.
  • You purchased your new main home located in the United States:
    • After December 31, 2010, and before May 1, 2011, or
    • After April 30, 2011, and before July 1, 2011, if you entered into a binding contract before May 1, 2011, to purchase the home before July 1, 2011.

Who Cannot Claim the Credit

You cannot claim the credit for a home purchased in 2011 if any of the following apply.

  • The purchase price of the home is more than $800,000.
  • Your modified adjusted gross income is $145,000 or more ($245,000 or more if married filing jointly).
  • You cannot claim the credit for any year for which you can be claimed as a dependent on another person's tax return.
  • You (and your spouse if married) are under age 18 on the date of purchase.
  • You are a nonresident alien.
  • Your home is located outside the United States.
  • Neither you nor your spouse (if married) was on qualified official extended duty outside the United States as a member of the uniformed services or Foreign Service or an employee of the intelligence community.
  • You acquired the home by gift or inheritance.
  • You acquired your home from a related person.
  • You acquired your home from a person related to your spouse.

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