§ 36. First-time homebuyer credit
(a)
Allowance of credit
In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence.
(b)
Limitations
(1)
Dollar limitation
(A)
In general
Except as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $8,000.
(B)
Married individuals filing separately
In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting “$4,000” for “$8,000”.
(C)
Other individuals
If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000.
(2)
Limitation based on modified adjusted gross income
(3)
Limitation based on purchase price
No credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000.
(4)
Age limitation
No credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section
7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer’s spouse meets such age requirement.
(c)
Definitions
For purposes of this section—
(1)
First-time homebuyer
The term “first-time homebuyer” means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.
(2)
Principal residence
The term “principal residence” has the same meaning as when used in section
121.
(3)
Purchase
(A)
In general
The term “purchase” means any acquisition, but only if—
(i)
the property is not acquired from a person related to the person acquiring such property (or, if married, such individual’s spouse), and
(4)
Purchase price
The term “purchase price” means the adjusted basis of the principal residence on the date such residence is purchased.
(5)
Related persons
A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section
267 or
707
(b) (but, in applying section
267
(b) and (c) for purposes of this section, paragraph (4) of section
267
(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants).
(6)
Exception for long-time residents of same principal residence
In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.
(d)
Exceptions
No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if—
(2)
the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the close of such taxable year,
(3)
a deduction under section
151 with respect to such taxpayer is allowable to another taxpayer for such taxable year, or
(f)
Recapture of credit
(1)
In general
Except as otherwise provided in this subsection, if a credit under subsection (a) is allowed to a taxpayer, the tax imposed by this chapter shall be increased by 62/3 percent of the amount of such credit for each taxable year in the recapture period.
(2)
Acceleration of recapture
If a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection (a) (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the end of the recapture period—
(3)
Limitation based on gain
In the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph (2) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a) to the extent not previously recaptured under paragraph (1).
(4)
Exceptions
(A)
Death of taxpayer
Paragraphs (1) and (2) shall not apply to any taxable year ending after the date of the taxpayer’s death.
(B)
Involuntary conversion
Paragraph (2) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section
1033
(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence.
(D)
Waiver of recapture for purchases in 2009 and 2010
In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008—
(E)
Special rule for members of the armed forces, etc.
(i)
In general
In the case of the disposition of a principal residence by an individual (or a cessation referred to in paragraph (2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual’s spouse, for qualified official extended duty service—
(5)
Joint returns
In the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection.
(6)
Return requirement
If the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section
6012, be required to file a return with respect to the taxes imposed under this subtitle.
(g)
Election to treat purchase in prior year
In the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat such purchase as made on December 31 of the calendar year preceding such purchase for purposes of this section (other than subsections (b)(4), (c), (f)(4)(D), and (h)).
(h)
Application of section
(1)
In general
This section shall only apply to a principal residence purchased by the taxpayer on or after April 9, 2008, and before May 1, 2010.
(2)
Exception in case of binding contract
In the case of any taxpayer who enters into a written binding contract before May 1, 2010, to close on the purchase of a principal residence before July 1, 2010, and who purchases such residence before October 1, 2010, paragraph (1) shall be applied by substituting “October 1, 2010” for “May 1, 2010”.
(3)
Special rule for individuals on qualified official extended duty outside the United States
In the case of any individual who serves on qualified official extended duty service (as defined in section
121
(d)(9)(C)(i)) outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual’s spouse—