Can taxpayers claim the tax credit in 2008 for a home bought in 2009?
The IRS allows "taxpayers to elect to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008."
This means that the 2008 income limit (MAGI) applies and the election effectively accelerates when the credit can be claimed. That is, it enables taxpayers to be able to claim this tax credit on their 2008 tax returns instead of for 2009 returns.
Clearly, taxpayers will benefit from this election as a home buyer in 2009 will definitely know their 2008 MAGI assuming they has filed their tax returns with certainty, thereby helping the buyer know whether or not the income limitation will reduce their First Time Home Buyers Tax Credit.