If you’re considering purchasing a home this year in Greater Central Ohio, you should be aware that as part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 – better known as the First-Time Homebuyer Credit Form.

What’s it all about? Well, true to tax code standards, the 10-field form is accompanied by 3 pages of instructions.   Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.

For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term “first-time home buyer”.

In addition, Form 5405 highlights the math behind the tax credit.  In general, the First-Time Homebuyer Credit is equal to the lesser of:

• $8,000 for homes bought in 2009
• 10 percent of the home’s purchase price

Don’t foreget though, that married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the “main home”.

The form 5405 is a comprehensive reference.  However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances.  Also remeber that I’m a Realtor and that there is no substitute for professional, paid advice.