First-time home buyers can take a tax credit of as much as 10% of the purchase price, up to a maximum $8,000. "First-time" is defined as not having owned a principal residence for three years before the purchase.

There is now a tax credit for repeat buyers as well as for first-time buyers. Taxpayers who have lived in one residence for five consecutive years of the past eight can now qualify for a tax credit of as much as 10% of the purchase price, up to a maximum $6,500, of a new principal residence. The new home does not have to cost more than the old one.

To take advantage of the tax credits, a buyer must have a contract in place before May 1, 2010, and the deal must close before July 1, 2010.

Income limits for people who qualify for a tax credit are more generous than under the previous law. For single filers, the credits now phase out between $125,000 and $145,000 of modified adjusted gross income; for married couples, the range is $225,000 to $245,000.

There are a couple of interesting twists. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2010 as if the purchase occurred on December 31, 2009. This means that the previous year's income limit (MAGI) applies and the election accelerates when the credit can be claimed. A benefit of this election is that a home buyer in 2010 will know their prior year MAGI with certainty, thereby helping them know whether the income limit will reduce their credit amount.

If the applicable income phase-out would reduce your home buyer tax credit amount in the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount.

The bottom line is that if you close on your house purchase before July 1, 2010 and qualify for this credit you can choose to amend your 2009 tax return and collect your credit now.

Our tax department would be happy to advise you on qualifications for this credit and we can also amend your 2009 tax return (regardless where it was done originally) to file for your credit.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).