Publication 530: Tax Information for First-Time Homeowners; Publication 530 Introductory Material

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Important Reminders

District of Columbia first-time homebuyer credit. The credit for first-time homebuyers in the District of Columbia is not allowable for property purchased after 2003. For more information about this credit, see page 2.

Limit on itemized deductions. Certain itemized deductions (including real estate taxes and home mortgage interest) are limited if your adjusted gross income is more than $139,500 ($69,750 if you are married filing separately). For more information, see the instructions for Schedule A (Form 1040).

Limit on mortgage interest credit. Your mortgage interest credit for 2003 can offset both your regular tax (after reduction by any foreign tax credit) and your alternative minimum tax for the year, if any. See Figuring the Credit under Mortgage Interest Credit.

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Introduction

This publication provides tax information for first-time homeowners. Your first home may be a house, condominium, cooperative apartment, mobile home, houseboat, or house trailer.

How you treat items such as settlement and closing costs, real estate taxes, home mortgage interest, and repairs.
What you can and cannot deduct on your tax return.
The tax credit you can claim if you received a mortgage credit certificate when you bought your home.
Why you should keep track of adjustments to the basis of your home. (Your home's basis generally is what it costs; adjustments include the cost of any improvements you might make.)
What records you should keep as proof of the basis and adjusted basis.

District of Columbia first-time homebuyer credit.

You may be able to claim a one-time tax credit of up to $5,000 ($2,500 if married filing separately) if you buy a main home in the District of Columbia. You must reduce the basis of your home by the amount of the credit you claim. Only purchases after August 4, 1997, and before January 1, 2004, qualify for this credit.

The credit is not allowed if you acquired your home from certain related persons or by gift or inheritance.

You qualify for the credit if you (and your spouse if you are married) did not have an ownership interest in a main home in the District of Columbia for at least 1 year before buying the new home. Individuals with modified adjusted gross income of $90,000 or more ($130,000 or more in the case of a joint return) cannot claim the credit. Individuals with modified adjusted gross income between $70,000 and $90,000 (between $110,000 and $130,000 in the case of a joint return) can claim only a reduced credit.

Use Form 8859, District of Columbia First-Time Homebuyer Credit, to figure your credit. See the form and its instructions for more information.

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Useful Items - You may want to see:

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Publication 530Introductory Material

Important Reminders

Introduction

Useful Items - You may want to see:

Publication 530
Introductory Material