In general a tax credit is dollar for dollar off your taxes. So if you have a tax credit of $1,000, and would owe $5,000 in taxes but for the credit, you would have to pay only $4,000 in taxes.
If you had a tax deduction of $1,000 and would pay $5,000 but for the deduction, how much you would have to pay would depend on your tax rate. If your marginal tax rate is 25%, that $1,000 deduction would allow you to pay only $4,750 in taxes.
So a credit is generally better than a deduction, if they are the same amount.
Neither generally applies to a purchase transaction, because a purchase is not typically a taxable event. You might get a mortgage interest deduction if you borrow to buy the property, and that would typically be a deduction.
You should consult a tax adviser for your specific situation.
Good luck to you in any case,
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
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