While I was away on vacation Congress passed a Housing Bill. There are a number of tax impacts of the legislation:
A first-time homebuyer’s credit of up to $7,500. This credit can be taken if you are a first-time homebuyer who purchases a home between April 1, 2008 and July 31, 2009 who meets the income qualifications (phase out of the credit begins with at an AGI of $75,000 if single or $150,000 if married-filing-jointly (MFJ)). This credit must be paid back over 15 years beginning two years following the purchase. Additionally, the credit can be taken in 2008 if a qualified home is purchased in 2009.
There is a one-time property tax deduction for taxpayers who don’t itemize for 2008. It’s $500 if single or $1,000 if MFJ.
New credit card reporting requirements are one of the offsets of the cost of this legislation. The new requirements, effective January 1, 2011, require credit card processors to report the total dollar amount of transactions to the IRS and the merchant if the total is at least $20,000.
There are a number of other tax impacts of this legislation. CCH has published an excellent summary that’s available here.
Hat tip: Tax Guru-Ker$tetter Letter