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Sheena Maskell Sheena Maskell
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7 years ago
Bruce and Deidre purchase a new home costing $500,000 on February 1, 2010.  They qualify as existing homeowners and claim the maximum credit available on their 2010 tax return.  Their 2010 AGI is $230,000. What is the amount of the homebuyer's credit allowable?
A) $0
B) $4,875
C) $6,500
D) $8,000
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
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#1
7 years ago
B
Here's why: The are eligible for the $6,500 credit, but are subject to the phaseout based on AGI.  Their AGI of $230,000 exceeds the beginning phaseout amount of $225,000.  6500 - (5/20 × 6500) = $4,875.
Sheena M. Author
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#2
7 years ago
Thank you so much
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