From the IRS site....Q. I purchased a duplex home with two separate dwelling units. I will live in one dwelling and will rent out the other dwelling unit and report the rental income on Schedule E. May I qualify for the first-time homebuyer credit, and what amount do I use for the purchase price to determine the amount of the credit?
A. Yes, you may qualify for the credit for the dwelling unit that you use as your principal residence. To determine the amount of your credit, you must allocate the purchase price of the duplex between the two separate dwelling units. Your credit is 10% of the portion of the purchase price of the duplex allocated to your dwelling unit that you use as your principal residence, up to a maximum credit of $8,000. You may not use the entire purchase price of the duplex to determine the amount of your credit.
Good luck, Dunes
You can find some useful info on the tax credit at the following website: http://www.federalhousingtaxcredit.com/
As other agents here have mentioned, you should always check with your tax adviser to be sure. Hope this info helps..
Coldwell Banker Residential Brokerage
Web Reference: http://www.jbknowsthevalley.com
Keep in mind each year you own a home you receive annual tax benefits
While you have conference with CPA ask if you receive any other tax deductions purchasing a home example closing costs and etc.
Congrat's on your new residence.
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Sunny......don't forget there are income limits, too............as a couple your modified adjusted income can be $150,000 for the maximum credit...it phases out at $170,000. You have to live in this home, as your principal residence, for 3 years or (with some exceptions) you will have to pay it back.
Prudential NJ Properties
First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009. The credit:
Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
Applies only to homes used as a taxpayer's principal residence.
Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405.