Category Archives: Co-Ownership

New Video: What to know when you’re buying with a partner and want to claim the home buyer tax credit.

Posted on March 9, 2010 | Leave a comment

We have a bunch of new videos this week at HomeBuyerTaxCredit.com, so we wanted to make sure we highlight them here on the blog. In this video, we discuss all the issues that come up when you are buying with someone else, such as a girlfriend/boyfriend situation, unmarried life partners, or someone getting “help” from his or her parents.

We put together the video because we get a lot of questions on the Questions section like this:

  • I qualify, but my boyfriend doesn’t, should I buy on my own?
  • Does it matter if my parents are on the mortgage with me?
  • How much of a credit do I get if I’m buying with someone else?

We answer all those questions in the video.  Check it out.

→ Leave a comment

Posted in Co-Ownership, First-Time Home Buyers, Long-Time Homeowners

Tagged , , ,

Update on the Marriage Penalty: We have a Special Report, and we have a Bill!

Posted on March 4, 2010 | 22 Comments

UPDATE 3.09.10: We  have added the video we made about the Marriage Penalty.

UPDATE 4.13.10: The video references a “Fourth Type” of Marriage Penalty questioning whether a married couple would qualify for the Home Buyer Tax Credit in situations where the couple has lived in a home for the requisite five-consecutive-years-out-of-eight period but only one spouse is on the title to the property. The IRS has now confirmed for us that in those situations, ownership by one spouse would be imputed to the other spouse, so those couples would indeed be eligible for the Home Buyer Tax Credit as long-time homeowners (assuming they otherwise qualify).

We know that a lot of you have been following our coverage of the “Marriage Penalty” in the Home Buyer Tax Credit, particularly those of you who have been affected.  We wanted to give you an update on two fronts:

First, we have put together a “Special Report” on the Marriage Penalty, which summarizes and reorganizes everything we’ve written about the Marriage Penalty in the Home Buyer Tax Credit.  We thought it would be helpful as a document to send out to people who might be interested in the issue, particularly for your Congressional Representatives so that they understand the issues presented.

Second, and more importantly, we have a bill — H.R. 4701!  Congressman Eliot L. Engle, the Representative for the 17th District of New York (and, in fact, my Conressman) has drafted a bill to fix the Marriage Penalty and is circulating it among his colleages on the House Ways and Means Committee.  We have no idea if this bill has any chance of passage, but we are hopeful that our Congressional leaders will see that the impact of the Home Buyer Tax Credit will be severely undermined by the Marriage Penalty.

If you want to get involved, here’s what you can do:

  • Join our Facebook Cause, which is now up to 250 members.  We’re not exactly “Farmville,” but it’s something….
  • Send a link to HR 4701 and to our Special Report to your Congressional representatives and tell them that you support fixing the Marriage Penalty.
  • And post the bill and our Special Report to your twitter accounts, facebook, anything you do that can get the word out!

This is the first sign we’ve had that this might actually change.  So let’s act on it.

→ 22 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, IRS, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , , , ,

A Potential Solution to the “Marriage Penalty” in the Home Buyer Tax Credit

Posted on January 29, 2010 | 21 Comments

UPDATE April 13, 2010: This post references a “Fourth Type” of Marriage Penalty questioning whether a married couple would qualify for the Home Buyer Tax Credit in situations where the couple has lived in a home for the requisite five-consecutive-years-out-of-eight period but only one spouse is on the title to the property. The IRS has now confirmed for us that in those situations, ownership by one spouse would be imputed to the other spouse, so those couples would indeed be eligible for the Home Buyer Tax Credit as long-time homeowners (assuming they otherwise qualify).

For the last few weeks, we’ve been promoting a campaign to fix the “Marriage Penalty” in the Home Buyer Tax Credit, which denies married couples a tax credit in situations where unmarried couples would get a credit in the same situation. To remind you, we’ve discovered four specific marriage penalties in the IRS application of the Home Buyer Tax Credit that would render a married couple ineligible, all of them situations where at least one partner in an unmarried couple would be able to claim the credit:

  1. Where one spouse qualifies as either a first-time home buyer or a long-time homeowner, but the other spouse does not qualify for either.
  2. Where one spouse qualifies as a first-time home buyer, but the other spouse qualifies as a long-time homeowner.
  3. Where both spouses qualify as long-time homeowners, but for different principal residences (i.e., they both lived in a home they owned for five consecutive years out of eight, but for different residences).
  4. Where a married couple has lived and owned in a home for five consecutive years out of the last eight, but only one spouse is on the title to the home.

In each of these situations, a married couple is apparently ineligible, according to IRS interpretations of the home buyer tax credit legislation.  We’ve profiled some of those people, those who have written to us.  If you are interested in the issue, or  have a story to tell, you should post it to our comments section and join our Facebook Cause group. Continue reading →

→ 21 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, IRS, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , ,

Who is falling victim to the “Marriage Penalty?” in the Home Buyer Tax Credit? These people!

Posted on January 25, 2010 | 24 Comments

Last week, we asked visitors and readers to submit their story if they have fallen victim to the unintentional “Marriage Penalty” in the Home Buyer Tax Credit.  We got a number of comments and emails, which we’ll re-print below, but we hope that anyone who follows this issue and is affected would contact us so we can continue to put a human face on the issue.

First, from Anthony, in the Questions section:

We just put in an offer yesterday and it was accepted. But after reading your article I am slightly concerned about our eligibility for the tax credit.

My wife and I have been married for 10 years. In August 2003 (so 6+ years ago) we purchased a 2 family residence and have been living there ever since – renting out the other side.

When we were looking to buy, we already had one child so my wife was not working. I was the sole income. When we went to apply for the loan, the bank said my credit and salary were good enough to not need my wife on the application. He said it wouldn’t be an issue. So the application went through with just my name, but we had BOTH our names on all the contracts and documents. When we got to the closing everyone started panicing because they said that could not be done – my wife could not be on the contract and documents because the loan was in my name only. They said it wasn’t that big a deal so they just crossed out her name.

So – for the entire time we have been living in this house, it has been in my name. I always assumed she was still co-owner of it, but now I am nervous that when we apply for the 6500 tax credit on the new house, the IRS would consider her a “new” homeowner and me a “long time” homeowner so we lose.

Do you think that will be the case? Or is she automatically an owner because we were married for 4+ years already when we bought it?

Anthony was the first to raise what we’re calling the “fourth” type of marriage penalty: situations where a married couple has lived in a home owned by one of the spouses for at least five consecutive years out of the last eight, but who might not be eligible because both spouses did not have ownership.  We’re still looking into the issue of eligibility, and we’ll provide an update as soon as we know.
Continue reading →

→ 24 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , ,

A Fourth Type of Marriage Penalty in the Home Buyer Tax Credit?

Posted on January 25, 2010 | 10 Comments

UPDATE April 13, 2010: This post references a “Fourth Type” of Marriage Penalty questioning whether a married couple would qualify for the Home Buyer Tax Credit in situations where the couple has lived in a home for the requisite five-consecutive-years-out-of-eight period but only one spouse is on the title to the property. The IRS has now confirmed for us that in those situations, ownership by one spouse would be imputed to the other spouse, so those couples would indeed be eligible for the Home Buyer Tax Credit as long-time homeowners (assuming they otherwise qualify).

Some recent questions from visitors to HomeBuyerTaxCredit.com have brought up a new type of “Marriage Penalty” that we had not considered before.  To remind you, we’ve started a campaign to challenge the IRS interpretation of the Home Buyer Tax Credit, which we’ve said creates a “Marriage Penalty” against married couples by rendering them ineligible to claim a tax credit in situations where an unmarried couple could claim a credit.  We’ve previously identified three types of marriage penalties:

  1. Where one spouse qualifies as either a first-time home buyer or a long-time homeowner, but the other spouse does not qualify for either.
  2. Where one spouse qualifies as a first-time home buyer, but the other spouse qualifies as a long-time homeowner.
  3. Where both spouses qualify as long-time homeowners, but for different principal residences (i.e., they both lived in a home they owned for five consecutive years out of eight, but for different residences.

Based on questions from readers, we’ve now discovered a fourth potential type of marriage penalty: where a married couple has lived and owned in a home for five consecutive years out of the last eight, but only one spouse is on the title to the home. Continue reading →

→ 10 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, IRS, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , , ,

What can you do to end the “Marriage Penalty” in the Home Buyer Tax Credit?

Posted on January 19, 2010 | 27 Comments

Today, we published an op-ed in the Journal News, the local paper in the Hudson Valley area of New York, calling for an end to the “Marriage Penalty” in the Home buyer Tax Credit. We have actually already asked local members of Congress to look into the issue, and the feedback we’re getting is that they see the problem and are trying to figure out how to solve it.

We have some background on the issue here, and a video that discusses how the Home Buyer Tax Credit impacts married couples versus unmarried couples here.

What can you do to help?  Our contacts in the government say that it would help enormously if we could put a human face on the issue, to find a married couple who is in the process of looking to buy a home, but who is discouraged because they will not be able to claim the Home Buyer Tax Credit because of the Marriage Penalty.

If you’re in that position, or you know someone who is, either post your story here or email us.

And if you want to join our Facebook cause to end the Marriage Penalty, then go here.

The Problem

The basic problem is this: the Home Buyer Tax Credit is designed to incentivize home purchases this year, and it should have a significant impact. With the increased income levels, Goldman Sachs estimates that virtually all first-time home buyers and up to 70% of long-time homeowners would be eligible to get a tax credit.

But the impact is going to be undermined because thousands of married couples will not be eligible due to a very restrictive reading of the legislation by the IRS. Why?  Because the IRS will only allow married couples to claim the credit if both spouses qualify for the same type of credit in their own right, even if the couple would get a tax credit if they were unmarried. Married couples are tested together, and must both be eligible. This is not the case for unmarried couples, who are tested individually such that if one does not qualify, the other can still get a credit. Continue reading →

→ 27 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , ,

Married Couples and the Home Buyer Tax Credit

Posted on January 8, 2010 | 11 Comments

The Home Buyer Tax Credit is a wonderful program, but the already complicated eligibility requirements of the tax credit become even more complex if you are a married couple, or buying with someone else such as a significant other, a friend, or a family member.

For that reason, we have provided this analysis of the challenges facing married couples trying to claim the home buyer tax credit.

Married Couples

The home buyer tax credit’s application to married couples is extremely restrictive, generally requiring that both married partners fully qualify in their own right for the couple to claim the credit.  This has a lot of serious implications: Continue reading →

→ 11 Comments

Posted in Co-Ownership, First-Time Home Buyers, Home Buyer Tax Credit, Long-Time Homeowners, Marriage Penalty, Married Couples

Tagged , , , ,