1. Ameriprise Financial
Greg Younger, CRPC®
14755 N. Outer
Understanding the
Chesterfield, MO 63017
636.534.2092
gregory.d.younger@ampf.com
First-Time Homebuyer
Tax Credit
April 21, 2009

2. Ameriprise Financial Page 2
Understanding the First-Time Homebuyer Tax Credit
If you recently purchased a first home, or intend to purchase a first home in the next few months, you may stand
to benefit from the first-time homebuyer tax credit provisions included in the recently signed American Recovery
and Reinvestment Act. When it comes to the first-time homebuyer tax credit, though, there's quite a bit of
confusion. So it's worth taking a few minutes to make sure you understand how the credit works, and the time
period to which it applies.
First, the credit isn't new: Back in July of 2008, the Housing and Economic Recovery Act established a temporary
refundable first-time homebuyer credit equal to 10% of the purchase price of a principal residence, up to $7,500
($3,750 if married filing separately). The credit applied to first-time homebuyers who purchased a home on or
after April 9, 2008, and before July 1, 2009. Generally, you qualified as a first-time homebuyer if you, and your
spouse if you were married, did not own any other principal residence during the 3-year period ending on the date
of purchase. The credit was phased out for individuals with higher incomes, and had to be paid back over 15
years in equal installments (repayment would be accelerated if the home were to be sold during the 15-year
period or if the home ceased to be the principal residence of you or your spouse during that time).
The new legislation extends the credit to homes purchased by qualified first-time homebuyers through November
30, 2009. The new legislation also expands the credit. The credit remains 10% of the purchase price of the home,
but the dollar limit has increased to $8,000 (the cap for married individuals filing separate returns is half that
amount) for home purchases made after December 31, 2008, and before December 1, 2009. In addition, if you
qualify for the credit as the result of a home purchase in 2009, you don't have to pay it back over time, provided
the home remains your principal residence for 36 months.
The American Recovery and Reinvestment Act continues to allow you to elect to report a qualifying home
purchase made in 2009 as if it occurred on December 31, 2008 (allowing you to claim the credit on your 2008
federal income tax return). Unfortunately for many, the new legislation also continues to eliminate the credit for
those with higher incomes. The credit is reduced if your modified adjusted gross income (MAGI) exceeds $75,000
($150,000 if you're married and file a joint return) and is completely eliminated if your MAGI reaches $95,000
($170,000 if you're married and file a joint return).
Summary of rules for qualifying first-time homebuyers, by purchase date
When was home purchased? April 9, 2008 through December January 1, 2009 through
31, 2008 November 30, 2009
Maximum credit $7,500 ($3,750 if married filing $8,000 ($4,000 if married filing
separately) separately)
Does credit have to be paid back? Yes--generally, over 15 years in No, provided the home remains
equal installments your principal residence for 36
months
See disclaimer on final page
April 21, 2009

3. Ameriprise Financial Page 3
Credit is claimed on tax return for 2008 federal income tax return You can elect to treat the
what year? purchase of the home as if it
occurred on December 31, 2008,
claiming credit on 2008 tax return
($8,000 maximum credit limit still
applies even if reported on 2008
return); otherwise, credit is
claimed on 2009 tax return.
Credit phased out for higher Yes Yes
incomes?
See disclaimer on final page
April 21, 2009

4. Page 4
Ameriprise Financial The information contained in this material is being provided for general education
purposes and with the understanding that it is not intended to be used or interpreted
Greg Younger, CRPC®
as specific legal, tax or investment advice. It does not address or account for your
14755 N. Outer
individual investor circumstances. Investment decisions should always be made
Chesterfield, MO 63017 based on your specific financial needs and objectives, goals, time horizon and risk
636.534.2092 tolerance.
gregory.d.younger@ampf.com
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