Ms. Lank: I have always rented but would like to buy a house. A lot of my retirement income is tax-free, one way or another, and last year I didn't even owe $8,000 on my federal tax return. It doesn't seem fair, that if I buy a house this year I couldn't take advantage of the whole amount. -- Via e-mail
Answer: There's good news -- it is indeed fair. If you qualify, and if the house, condo or co-op you buy costs at least $80,000, you'll receive the full amount -- to quote you, "one way or another." If your tax bill doesn't use up all your credit, the government will send you a check for the rest.
Hasn't Owned Lately
Hello. One reader had a question on the $8,000 tax break that ends this year. My question: I am a former homeowner, but for the past six years I have been renting. Now, I am in the process of buying (still negotiating) and was wondering if I qualify for this federal tax credit. If so, when does it have to be repaid? -- L.H.
Answer: If neither you nor your spouse has owned a house during the past three years, you regain your virginity as a first-time buyer. But don't think of that tax break as covering the whole of this year. It applies only to purchases with a final closing date before December 1.
The 2008 tax credit was pretty much an interest-free loan of $7,500, but this year's credit never has to be repaid.