26 January 2010

First-Time Homebuyer Credit for This Tiny House?

Dear Readers,

I'm looking into whether this home is eligible for the
First-Time Homebuyer Credit, which was introduced in the Housing and Economic Recovery Act 2008, and has been extended under the American Recovery and Reinvestment Act of 2009. It is a refundable tax credit for qualified purchases made in 2009.

The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000 for homes bought in 2009. The credit is claimed on
Form 5405.

Anyone considering this credit should consult a tax-preparer to discuss the particulars of their situation. I am addressing the issue here, nevertheless, because I have not found information on the tax credit in relation to "tiny houses" elsewhere. I'd like to raise the discussion among people building their own small mobile homes.

That said, I have two main points.

1) Because most of my building materials have been from free sources or scavenged, my overall building costs are low. In turn, 10% of the "purchase price of the home" will of course also be low. THIS IS GOOD, though it does mean even if I could get the refund it would be somewhere in the $300 dollar range, as opposed to the $8000 available to people who spend $80,000 for a home. Just want to put things in perspective.

2) When I learned mobile homes and house boats were considered "homes" to the IRS and soon after filled out Form 5405, I thought I'd found out something exciting to share with other people building mobile homes similar to mine.

In my
research today, I found out that the legislative changes that in November 2009 expanded and extended the credit also added documentation requiring that the 2009 tax return must be filed in paper — not electronic — and attach Form 5405, with one of the following:
  • For purchasers of conventional homes, a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names and signatures, property address, sales price and date of purchase.
  • For purchasers of mobile homes who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
  • For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

This being the case, I see I have further research. It seems I can either file a copy of the receipt of my flatbed trailer... which wouldn't include all the other costs of building... or see about obtaining a "certificate of occupancy" ...

More later.

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