Kauai Realtors talk about Tax Credit initiative

In Kauai and big island real estate related news, in an article by the Kauai Board of Realtors answered some frequently asked questions such as 'What is the tax credit for first-time homebuyers?'
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10 percent of the purchase price for a home. If the amount of the home purchased
— Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500. So far, all of this has not affected Big Island Real Estate much.
— How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 www.irs.gov/pub/irs-pdf/f5405.pdf.
— Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place. A lot of folks on the Big Island apparently did this type of thing.