IRS Tax Forms  
Publication 530 2001 Tax Year

Introduction

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

The following topics are explained.

  • 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 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 claimed. Only purchases after August 4, 1997, and before January 1, 2004, qualify for this credit.

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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Internal Revenue Service
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