Friday, August 22, 2008

On the Other Side of the Shell Game

My last post talked about the death of the last $0 down program.

However, the bill passed by Congress also had some interesting angles for first time homebuyers.

One of them is a tax credit. If a first time homebuyer buys a house between now and next summer, you will get a $7,500 tax credit on your next tax bill.

You don't get a check when you close your house -- you get a giant refund check when you file your taxes.

What's the catch? Oh yeah, there is a pretty big catch.
This tax credit must be REPAID. Yep, the IRS giveth and the IRS taketh away.

What it means is that each subsequent year you file your taxes you will pay back (interest free, mind you) a few hundred dollars to the IRS for that $7,500 tax credit.

No, you cannot use the tax credit for your house downpayment, but you will get a fat check come next year. You can buy whatever you want with it.

I would buy cartons and cartons of Camel Lights and 50 pounds of prime rib.

(And no, I don't smoke. I just think the idea of buying cigarettes is funny.)

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