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Pub. 530, Tax Information for First-Time Homeowners 2005 Tax Year

Publication 530 - Introductory Material


Reminders

Limit on itemized deductions. Certain itemized deductions (including taxes and home mortgage interest) are limited if your adjusted gross income is more than $145,950 ($72,975 if you are married filing separately). For more information, see the Instructions for Schedule A (Form 1040).

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

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.

The following topics are explained.

  • How you treat items such as settlement and closing costs, real estate taxes, sales 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.

  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.

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can write to us at the following address:


Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6406
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  You can email us at *[email protected]. (The asterisk must be included in the address.) Please put “Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.

Tax questions.   If you have a tax question, visit www.irs.gov or call 1-800-829-1040. We cannot answer tax questions at either of the addresses listed above.

Ordering forms and publications.   Visit www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the National Distribution Center at the address shown under How To Get Tax Help in the back of this publication.

Useful Items - You may want to see:

Publication

  • 523 Selling Your Home

  • 527 Residential Rental Property

  • 547 Casualties, Disasters, and Thefts

  • 551 Basis of Assets

  • 555 Community Property

  • 587 Business Use of Your Home

  • 936 Home Mortgage Interest Deduction

Form (and Instructions)

  • 8396
    Mortgage Interest Credit

See How To Get Tax Help, near the end of this publication, for information about getting publications and forms.

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