For much of 2010, we answered reader questions about the Home Buyer Tax Credit in this space. With the tax credit deadlines having passed, though, we will no longer be covering new questions. If you have a question, make sure to check our our Home Buyer Tax Credit information site, which has videos, overviews, an FAQ, and an Eligibility Test. Also, you can look through the questions already posted to see whether we might have addressed a similar issue.
And please remember that we are not accountants, nor are we intending to provide accounting advice. You should always consult your accountant regarding filing your taxes, and making decisions to purchase a home with the intention of claiming a tax credit.
I WENT INTO CONTRACT FOR A HOME THAT HAD TO BE BUILT , APPX. SEPTEMBER 07 I CLOSED ON THE HOME APRIL 3RD 2008 DO I QUAILFY FOR FIRST TIME HOME OWNER TAX CREDIT. I FILLED OUT THE QUESTIOINER YOU HAD AND IT SEEMS LIKE I QUALIFY BUT I’M NOT SURE, THE ACCT I SPOKE TO SAID I MISSED BY A FEW DAYS, IS THAT POSSIBLE, JUSTA FEW DAYS. TKS BOB M
Hi @Robert, sorry to confirm that you did miss it by a few days. You say you closed on April 3, 2008. The original first-time home buyer tax credit went into effect on April 8, 2008. You can see the tax credits in place over the past few years here.
Can I purchase a home on a contract for deed and still get the first time home buyers tax credit?
Hi @Eric, I’m not sure where you’re writing from. I’m a lawyer, and I used to teach Property Law, but I don’t know exactly what a “contract for deed” is. Can you explain?
Hello,
I have a unique situation and my mortgage broker told me to ask here to find out if I might still apply for the home buyer credit…so here goes! I was married in 2003, my husband had already owned his home for 3 years at that point..in 2006 he refinanced me onto the mortgage…he then asked for a divorce this past year…by law he had to refinance me off of the house in Feb 2010. However, I am now in contact to buy a house and will be closing April 2nd. I fit income wise…but am not sure if I can still apply for this credit…I never bought the house directly, just refinanced onto the loan…I’m hoping you can help me out! Thank you so much for your time! Michelle
Hi @Michelle, let me see if I have this correct. Your husband bought the house in 2000, you moved in when you got married in 2003, you lived there ever since. In 2006, you were added to the mortgage. In 2009, you got separated, and as terms of your divorce agreement he has to remove you from the mortgage lien by February 2010. You are now buying a new home. Okay, if all that’s correct, we still have a few more questions. Are you divorced yet? Under the IRS judgments that you can find here, your husband’s ownership interest will count against you if you are still married.
Here’s the thing. The real question here is whether the IRS would “impute” ownership of your husband’s property to you. Under the IRS statements that I linked above, the IRS stated that you could not qualify as a first-time home buyer if you husband owned property, unless you were actually divorced. But those statements were made before the long-time homeowner credit was in place, so the next question is whether your living in that property since 2003 makes you a long-time homeowner by imputation. I don’t know the answer to that question at this point. Whether you were on the mortgage is irrelevant (I’m assuming you were never on title), the issue is (1) whether your living in the property with your husband would impute ownership to you to make you a long time homeowner, or (2) whether your lack of actual ownership during that time, and your divorce (if final before you close on your new property), render you eligible as a first-time homebuyer. My feeling is that you should be one or the other, so long as your divorce is final before you close on your new property.
My husband and I separated in 2006. I moved out and rented for 2006, 2007 and 2008. I signed the Quick Claim in 2007 but did not live in the primary residence I owned for that year. I also did not file any mortgage taxes for 2006, 2007 or 2008. Do I qualify if my name was still on the title in ’06 and ’07 but I did not live there?
Hi @Nicole, this is a thorny one. Here’s the problem. Even if you didn’t live there, so long as you were married, and your husband owned and live there, his ownership is imputed to you in a way that prevents you from qualifying as a first-time home buyer. So even if you quit-claimed the deed at some point, his ownership, combined with your continued marriage, keeps you from being a first-timer. So the question is when you were divorced. You can find more information from the IRS about this here.
Here are the relevant IRS statements that seem to indicate bad news for your situation:
Your report states related persons includes brothers and sisters; however, the IRS instructions for Form 5405 says related persons only include ancestors and lineal descendants.
Hi @Kelli, you’re right, we fixed that on the website, but we missed it when we updated the report. Thanks for that. You’re right, only ancestors and lineal descendants.
I am purchasing a house from the estate of my step-grandfather. My mother and step-uncle are the co-executors. Will I be disqualified from the tax credit because my mother is co-executor? If not, will I be disqualified because it is the estate of my step-grandfather? My grandmother passed away in 2001, so technically, I was not related to the owner of the house. Thanks
Hi @Kevin, I’m afraid you have stumped me. The legislation does not speak to this specifically, neither do any of the comments, so I do not know. An executor of an estate is technically (at least in New York, where I live) an owner of the property, although it’s clearly not what the legislation intended. Also, the law does not clearly define whether a step-relative qualifies as a relative. Try calling the IRS hotline and let me know what you find out. I’ll look into it, and post if I get anywhere. Telephone Assistance for Individuals:
Toll-Free, 1-800-829-1040
Thank you so much. And to answer your questions, yes my divorce was final as of October 2009… My next questions is, who would I call to find out if the IRS would qualify me through impute ownership? Or do I just need to wait until after closing on my house? Would I just re-file my taxes and hope for the best? Once again I appreciate the help! Thanks
Hi @Michelle, thanks for the followup. Okay, if you are divorced, the issue is whether you are eligible for the first-time credit or the long-time credit. You should definitely get one or the other, since you lived with your husband in a house he owned for more than five consecutive years out of the last eight. The fact that you are no longer married means that either his ownership is imputed to you during the term of your marriage (at which point you’re a long-timer), or it’s not (at which point you’re a first-timer. The point about being unmarried is that his current status does not affect yours. This is a pretty thorny one, so try calling the IRS at 1-800-829-1040 and see what they say.
I signed a contract to purchase my house on September 16th 2008. That also is the date that I gave the downpayment. I did not get the deed under my name though until June 26 2009.I was wondering if i still qualify for the tax refund of being a first-time homebuyer.
Hi @Laura, thanks for posting. The date you signed contracts does not matter, it’s the date of your closing that determines your eligibility for a tax credit. If you closed in June 2009, you were subject to the first-time home buyer tax credit in effect for 2009 (prior to November 7th, 2009). The Eligibility Test won’t answer those questions, because it applies to transactions after November 7th. So if you are eligible under the guidelines in place last June, you would qualify.
I understand i cannot get the credit buying a home from parents but what if they have a life estate and i purchased the home to move in and take care of them letting them live out their lives there i still am not eligible ????
Hi @Kathy, thanks for posting, but I’m afraid we don’t have enough information. We need some dates here. Yes, you cannot get a tax credit for buying from your parents, but I’m not sure what the life estate has to do with it. Who owns the property, and when are you planning on buying it (or did you buy it)?
I think you answered my question because i purchased the home with my fiance but the deed is in my name only so i guess iam not eligible — but if we purchase a 2nd place is he eligible for first time buyer credits if he was a co-borrower ??
Hi @Kathy, thanks for the question, but I’m a little confused. If you purchase with a fiance, you purchase as an unmarried person, so the “marriage penalty” issues do not apply to you, so long as you closed before you got married. If the deed is in your name, only you are eligible for the tax credit, but you can get the full thing. If you buy a second place, you cannot get a second credit (you can’t live in two places, right?), and he could not get a credit on it unless he was going to live there. Assuming you’re both going to live in one place (which in my experience helps a marriage along), you’ll have to claim one place as your main home and get the credit for that place. It doesn’t matter who is on the mortgage.
Hello, I am a US citizen and my husband a legal resident. We are purchasing a home and both of us are first-time home buyers. However, the home is going to be under my name alone. Will we still qualify for the homebuyer tax credit even though both of our names are not on the contract? And, we will qualify even though my husband is not a US citizen but is a legal resident?
Hi @Yvonne, a permanent legal resident can get the tax credit, so that’s not an issue. Assuming everything else is in order, and you qualify under the other criteria, his citizenship situation shouldn’t stop you. It also doesn’t matter if you take it in your name or both of your names, you would still qualify for the credit. It doesn’t matter if his name is not on the title.
What if you filed separately, how do you claim the credit for him if his name isn’t on the title? Because on the 5405 it looks like you both have to file paperwork and claim $4000 each.
Hi @Mel, you should check with your accountant about your tax filing questions. Basically, though, it might be that he needs to be on the title to claim a portion of the credit. As a married spouse filing separately, the most you can get personally is that $4,000, and if you’re the only one on the title that might be all you can claim. But, again, this is something to check with your accountant or a tax filing professional.
If I purchase and close on my home by 6/30/10 do I have to amend my 2009 Federal Taxes or can I file with my 2010 taxes. I cannot decide wether to file an extension or not because may not close in time.
Hi @Robin, you can do either. You can either amend your 2009 taxes or take the credit on your 2010 taxes. If you qualify for your 2009 income, you might want to take the credit for 2009 income, just in case you end up outside the income limitations for 2010. You can either amend your taxes, or maybe get an extension on your return.
i understand that the relative clause was put in to avoid scams, but does that change at all when i am dealing with an estate of a deceased grandparent? my mother is the administrator of the estate. is there any tax credits available at all?
Hi @Scott, you can only get the credit for an actual purchase, not an inheritance. If you were to buy the property from an estate, you might qualify, but the question is whether the seller would technically be the executor of the estate (acting as an executor), or the actual estate-holder (your grandparent). I do not know the answer to that question, you’ll have to check with your accountant (or the estate attorney), or the IRS.
I purchased a duplex in August 2002 and lived in one unit as my primary residence from August 2002 through September 2007 and rented out the other unit. I moved out of state and rent a townhome but still own the duplex with both units rented. Do I qualify for either of the tax credits? Does living in the duplex unit within the past 3 years disqualify me from the first time home buyer credit? Do I qualify for the step up credit?
HI @Janet, according to these facts, it looks like you would be eligible as a long-time homeowner, but not a first-time home buyer. You are a long-time homeowner because you lived in a home that you owned (the unit in the duplex) for five consecutive years out of the last eight (indeed, you just made it on all counts — August 2002 is within eight years of the June 30, 2010 deadline, and August 2002 through September 2007 is one month more than the five consecutive year requirement). All that said, you still have to qualify under the other requirements. Whether you lived in that duplex within the past three years is immaterial — you’re not trying to qualify as a first-time home buyer, and as of September 2007 you qualified as a long-time homeowner. Hope this is helpful.
Im buying a home on land contract from a private seller. can i still recieve the tax credit.
Hi @Dale, I’m not sure what a “land contract” is. Is there a house on the property? Please resubmit your question with a little more detail. Thanks.
I am going to be signing a conract in the next week and closing April 15. How would I go about getting the Tax Credit? Is there a way not to have to send the HUD in before April 15th? Can you apply with just the contract?
HI @James, thanks for posting. We have a whole set of informational resources about filing your taxes on our IRS page. The bottom line is that you can’t e-file, so you’ll have to submit all your closing paperwork (HUD-1 statement, etc.) as part of your return. You can’t claim the credit before you close, the IRS will not give you a credit until your closing is complete.
My fiance’ and I’s parents claimed us on their 2009 taxes. We are getting married June 2010 and closing on our house April 2010. I was wondering if we would still qualify for the tax refund for first-time home buyers?
Hi @Jessi, thanks for posting. Your question seems to go to the issue of whether you can claim the tax credit if you are claimed as a dependent on someone else’s tax returns. You indicate that your parents (or your fiance’s parents — my assumption is that you don’t share the same parents) claimed you and your fiance on their 2009 returns. Okay, well that means no credit for you on your 2009 tax return. But if you are not claimed for your parents’ 2010 return, and you close within the deadlines, you can claim the credit on your 2010 tax return (filed in April 2011).
Ok I found out that Joe’s (my fiance) parents are not going to claim him on their 2009 taxes but my parents have claimed me on theirs that would mean he qualifies and I don’t. But Joe and I are both on the contract to buy the house. So does that mean he couldn’t get the tax refund for first time home buyers because my parents claimed me and both of our names are on the contract?
Hi @Jessi, if you’re not married, then your and Joe’s eligibility are measured independently. He can get the full credit if only he is qualified, you can get the whole thing if only you are qualified, if you are both qualified you can split it in any reasonable manner. You might be out of luck, but he can get the full tax credit (if he is otherwise qualified). The fact that you were claimed as a dependent means that you could not claim it, at least not on your 2009 taxes. If you were married, then things might be different (although I am not sure that your being a dependent would disqualify — the marriage penalty largely affects calculation of your ownership history). As it is, you’re fine (assuming your fiance otherwise qualifies), although if I were you I’d start being really nice to Joe, since he’s going to get that nice tax credit and you’re not…..
were 4 months shorts of not living in our old home for 3 years. If we submit for the 8000 credit what can the irs do to us if we put we have not lived in our old home for 3 years and it really has been only 2 years 7 months.
jason
HI @Jason, thanks for posting. I’m a little confused by the question, though, particularly the way you’re describing your “just shy of three years” ownership history. Remember that to qualify as a first-time home buyer, you cannot have lived in a home you owned within three years of closing. To qualify as a long-time homeowner, you have to have lived in a home you owned for five consecutive years out of the last eight. So if you say you lived in your old home for just shy of three years, then you are not a long-time homeowner, and unless that ownership was more than three years ago, you’re not a first-time home buyer. If your point is that you lived in a home you owned just shy of three years ago, then that would have to be that you owned a home later than June 30th, 2007, since you can close as late as June 30, 2010 and still qualify. If that’s the case, and your closing was after June 30th, 2007 (by a few months, say), then you won’t qualify as a first-time home buyer. You can try to take the credit, but you’ll likely be denied. What can the IRS do? They can subject you to penalties, interest, and if your tax return is deceptive, you might be charged with some sort of tax fraud. None of that is fun. Everything we hear says that the IRS is going to review these returns very carefully, and it is not difficult for the IRS to check your prior returns to see when you stopped living in your old home, so I would not play games with it. You should check with your accountant just to be sure.
we are buying a house and want to know if we can use the 8000 tax credit to cover closing cost also we are putting 20% down but only have enough money to cover the main loan can we add closing cost in after we put down the 20%
Hi @Norman, although there has been commentary that people can get an “advance” on their tax credit at the closing table for certain FHA loans, we don’t know a bank that is offering that. There are lots of situations, though, where you can get your closing costs rolled into your loan, or offset by a seller’s concession. It depends on your bank, so talk to your loan officer. So, no, as far as we know, no bank is allowing you to get an advance on your tax credit to cover closing costs, and the IRS will NOT let you file your taxes and claim the credit prior to your closing.
Looking to purchase a house for my parents.
It will be the first house my parents ever own.
They are 65. I have to get the loan because they would never qualify. So I have been in my house for 10 years. Would I get the $6500 if I buy this one strictly in my name? Or would I qualify if my parents and my name were all on the l0an?
Is there anyway at all that we would qualify for the credit?
Hi @Steve, thanks for posting. It doesn’t matter who is on the loan, it matters who is on the title, and who lives there. If you’re not going to live there, you can’t get the tax credit. If your parents are not going to be on the title, then they can’t get the tax credit. If they are on the title, though, they can get the tax credit even if you are also on the loan. I don’t know what would happen if they are not on the loan at all — my sense is that the bank would not let them be on the title if they’re not on the loan.
My husband and I are first time home buyers. We are purchasing a modular home through Palm Harbor. We will be closing this month and they will begin construction on the home this month as well. They do not have an exact date for when the home will be complete and ready to move into. Since we will be closed with the Loan Company this month – do we qualify for the tax credit? Or do we still need to be residing in the new home by a certain date?
Hi @Crystal, the IRS has said that the closing date for new construction will be the date that you close, and for new construction that you are building (not buying from a contractor) the important date is the date you move in and have a certificate of occupancy. Your situation is a little unusual, in that you say you’re closing this month, but won’t be moving in for a few months. That’s a little tricky, so I’ll have to defer to your accountant. If you can definitely be moved in by June 30th, though, you should be okay.
will the tax credit be extended again? looking at new construction that won’t be settling til mid July. thanks
Hi @Giuseppe, my sense is that it will probably not be extended. That said, if the economy stays in the doldrums, and the credit continues to have a minimal impact (like it has in the past few months), we could see an extension. Don’t bet on it. Try to get that closing moved up!
This website is great so, in advance, thank you. My fiance and I are getting married on Aug 14th so we do not have to worry about the marriage penalty. She qualifies for the first time credit in every sense and I don’t qualify for anything because I’ve owned my current home for 3.7 years and it’s my first home. My question is, does it matter if I am on the mortgage loan? She will have her 2009 tax return amended and the deed will only be in her name (unless it’s ok to have it my name too). Per the previous replies here, it doesn’t apppear to matter who is on the loan (both vs just the qualifying buyer) and there also doesn’t seem to be any qualifying questions from the IRS that ask about the borrowers. I just want to make sure we won’t get audited and have to pay back the money. It will also affect what type of house we buy. We will qualify for much less if the loan can only be in her name. Are we safe for her to file for the credit if we’re both named on the loan?
Hi @Nick, thanks for posting, and for your nice words. Yours is such a specific situation that I’m going to be a little careful, and remind you to check with your accountant. That said, here’s my take — if two unmarried people buy a home, and one of them does not qualify, then the qualifying party can get the full tax credit. So it looks like your fiance would be able to get a full first-time home buyer tax credit. Since the IRS measures your marital status at the time you close, not the end of the tax year, you should qualify as an unmarried couple at the time you close (which will have to be by June 30th, so it will be before your marriage on August 14th).
On a personal note, congratulations. It happens that my anniversary is on August 14th, so I’m feeling all warm and fuzzy right now about our shared wedding date. Good luck! Great time to get married, although hopefully it won’t be 95 degrees, humid, and rainy for your wedding like it was for mine…..
I am in the process of buying a new home and wanted to know if I was eligible. When I spoke to my real estate agent they told me that was something my tax preparer could help me with. I do have another home that is under my name but it is not my primary residence never has been my parents use it as thier investment property. My tax preparer told me I was not eligible for this credit. Is that true.
Hi @Rebecca, thanks for posting. My general inclination would be to tell you to trust your tax preparer. But with regard to the situation you describe, if it is true that the property you own has not been your “main home” (i.e., you haven’t lived there) within three years prior to closing, your ownership should not prevent you from being a first-time home buyer. Go back to your tax preparer and ask why he or she thinks you would not be eligible. You can be a first-time home buyer even if you own property, so long as it is not property that you have lived in within the three years prior to closing.
Hi, I was legally separated in July 2009 and purchased a house in August 2009. My husband and I had lived in our house for 9 years before he bought me out. Wouldn’t I be eligible for the $6,500?
Hi @Aline, thanks for posting. Assuming you are otherwise eligible, and assuming that you owned the home with your husband for those nine years that you lived there, your ownership history qualifies you as a long-time home owner.
Does the earnings limit apply to earnings in 2009 or 2010? My taxable income in 2009 was almost exactly $125,000, but I retired at the end of 2009 and expect to earn about $80,000 in 2010. Will I qualify as a single filer?
Hi @Fred, thanks for the post. Finally, I get to give some good news. Yes, you can take the tax credit off either your 2009 taxes or 2010 taxes, so if you don’t qualify by income in 2009 you can take it off your 2010 taxes (at your lower income). More about that in the “Hidden Gems” blog post here.
Hi at the time before january 27 I was dating my wife at the time my grilfriend she owned her own home.On jan 27 2009 I closed on her home (I bought it off her so she can take care of some bills. We then got married in april 2009 she is not on the morg or deed. I know that because we got married after i bought the house off her that I can get the 8000 but the ? how do you answ the one ? did ether one of you own a house in the last three years. does that mean when we are married or before we got married.
Hi @Dan, thanks for the question. I’m assuming the “January 27″ in question was January 27, 2009. In that case, remember that the tax credit in effect at the time was different from the one in effect now, so don’t take the Eligibility Test to find out. If you never owned before, and were not married at the time you purchased, AND you are otherwise eligible, you should be eligible for the first-time home buyer tax credit in effect as of January 2009. The IRS measures whether you’re married at the time you close, not at the end of the tax year.
I am trying to find out if I qualify for the home buyer’s tax credit. I sold my previous house 2/2006 and bought my present home 7/2009. Based on the definition of a first time buyer, I should qualify since it was more than 3 years…however, the complication is that I was married 12/06 and divorced in 3/09 – my ex-husband put me on his warranty deed during this time (1/08 – 2/09). Does this disqualify me from the tax credit? Thank you!
Hi @Susan, thanks for posting. A little complicated. Without the marriage situation, you would qualify for the first-time credit that was in effect at the time you purchased your home. But if your husband did own property during the time you were married, and lived in that property, then his ownership would disqualify you as a first-time home buyer. Here’s the explanation for that.
I have a couple of question with the tax credit. 1) is the gov. going to extend the tax credit again? 2) If the home is sold before the 3 years is up how is the credit paid back? 3) can the house be renting in the 3 year period?4) If I live in the home for 3 months and rent it out for 9 month is this ok?
Hi @Dan, thanks for posting. To answer: (1) I don’t think it’s likely that the government will extend the tax credit. I actually just heard a talk with Richard Smith, the head of Realogy, who expressed the same thought. (2) If you sell the home within three years (or move out), you’d have to pay the credit back when you pay your taxes. (3) No, you have to live in the home for the three years. (4) No, you have to live in the home for the full three years. Hope this is helpful.
Hello. My fiancée currently owns our home and I am paying him “rent” monthly. I otherwise qualify for the tax break. If he sells me the house is that legal even if it’s been my address for two years? And would he or I have to pay a tax on the downpayment that he would then give me from him selling the house that would render the transfer not worth our while? Thanks for the help!
Hi @Kate. It doesn’t matter if you’ve been paying “rent” to your fiance, you’re not an owner. If you were buy the property from him, and are otherwise eligible, you would qualify for a Home Buyer Tax Credit. As for the down payment, that’s a little outside our jurisdiction with relation to the tax issues, you should talk to your accountant. My sense, and here I’m really out of my element, is that people are allowed to gift a certain amount every year tax-free, but you’ll need to check that. You would, though, have to pay other closing costs, which might make it not worthwhile to you. That said, you might have an interest in getting on the title, and the tax credit would help you pay down some of those closing costs. Remember that you are not a “married couple” so long as you are not married at the time of closing.
Hi @Kate. It doesn’t matter if you’ve been paying “rent” to your fiancee, you’re not an owner. If you were buy the property from him, and are otherwise eligible, you would qualify for a Home Buyer Tax Credit. As for the down payment, that’s a little outside our jurisdiction with relation to the tax issues, you should talk to your accountant. My sense, and here I’m really out of my element, is that people are allowed to gift a certain amount every year tax-free, but you’ll need to check that. You would, though, have to pay other closing costs, which might make it not worthwhile to you. That said, you might have an interest in getting on the title, and the tax credit would help you pay down some of those closing costs. Remember that you are not a “married couple” so long as you are not married at the time of closing.
My daughterand her fiance bought their first house in the fall of 2005,they were married june of 2006 and are living there now, do they qualify for any of the homeowner tax credits? Thanks,Jeff
I was wrong on my dates in my previous message. My daughter and her fiance bought the house in the fall of 2006 and were married in June of 2007. Thanks, Jeff
Hi @Jeff, if your daughter and her fiance purchased in fall 2006, then they have not owned the property for the requisite five consecutive year period (out of the last eight) that’s required under the Home Buyer Tax Credit. I’m sorry to be the bearer of bad news.
We bought our house in Sept 2008, do we qualify for the first time house-buy credit?
Hi @Jessica, thanks for posting, but it’s impossible to say. You can’t take the Eligibility Test, because it’s designed for closings after November 6, 2009. But you can check out the eligibility requirements that were in place for September 2008 closings here in our history section of the site. Hope that helps.
Hi
I have a quick question on behalf of some friends/clients of mine… They are a couple looking to buy a house and take advantage of the first-time homebuyer tax credit, but the problem is that she has owned a home before (until some time in 2008). My question is, will they still qualify for the $8000, or would he need to buy himself to get the full amount?
Thank you for your time,
Matt
Hi @Matt, thanks for posting. Most important issue is this: are they married. If they’re married, it doesn’t matter if they’re both on the title or not, her ownership history will count against him. And the fact that she’s owned, and he hasn’t, means that they will not be eligible no matter who is on the title. If they’re not married, then none of that matters — whether she is eligible or not, he can get a full tax credit if HE is eligible whether they buy together, or him alone.
I meet the requirements for 6500 $ tax credit as far as the income, home ownership within the last 8 years. I own a lot and planning on getting a construction loan and close for the house to be built April-May 2010. This will be a one time closing on the home and so I will meet the deadline for closing on the home. The building of the home though can not be completed by June 30. So the question here is if I have closed on the home by June 30, 2010 but have not occupied it by then, will I still get the tax credit for this replacement home which will be used as primary residence when completed?
Thanks.
Sicerely,
Madalina
Hi @Madalina, thanks for posting. The IRS rules on new construction make it clear that if you are building the home yourself, you need to have a certificate of occupancy by June 30th or you cannot claim the credit. The fact that you might “close a loan” before June 30th does not mean that you have closed within the meaning of the legislation. It’s not clear to me that you’re actually building the home, though. If you legitimately close with a builder, and your closing is irrevocable such that you own the property and the builder is going to continue to build the house on it, then you might qualify if you “close” with the builder by June 30th. But it seems to me that you’re saying that you are going to be building the home, that you already own the lot, and your only “closing” is for the loan to actually start construction. That seems to fit within the IRS requirements that you actually move in by June 30th.
I think we have a unique situation. My husband and I sold our home of 33 years in August of 2009. We now rent a home – and will do so for the next 3 1/2 years until our son graduates from high school. We have purchased and closed on a single family home in North Carolina in Dec of 2009. It is our intention to move to North Carolina – living there full time when our son graduates. Do we qualify for a tax credit?
Hi @Marty, thanks for posting. It looks like you’re not going to be living in that home in North Carolina, so I would say that it’s unlikely that you qualify. You would need to declare the North Carolina home as your residence, and represent that you live there to the IRS. Very tough to do that if your child lives in another state and goes to high school. Sorry to give bad news.
My wife and I were married last may. We both live in a home that I purchased in Oct 2004. We are looking to buy a new home together in the very near future. She would be a first time homebuyer and I would be a step up. Do we both have to qualify to one category to get the credit? Is there anything we can do?
Hi @Jordan, yours is another one of those classic situations involving the marriage penalty. You would qualify as a long-time homeowner, she would qualify as a first-time home buyer, but together you don’t qualify because you’re not eligible for the SAME credit (for those of you keeping track, that’s marriage penalty type #2). Jordan, check out all our materials on the marriage penalty to see what we’re trying to do about this.
I have a question about the first time home buyers credit. I lived in this residence from 2001-2009 when my father purchased the house for me to live in through college. I graduated college in 2004 and my father added my name to the loan. From 2005 to 2009, I deducted the mortgage interest on my tax returns and paid the mortgage. My name was never added to the title. My husband, father and I sold the home on December 30th, 2009 and my husband and I are currently in contract on the purchase of a home. Do I qualify for the first time home buyers credit since I never officially purchased the home?
Hi @Leslie, thanks for posting. From a literal reading of the statute, you would qualify as a first-time home buyer because you were never an owner of your father’s home, even though you paid the mortgage and got deductions as a result. That said, I have spent countless hours going over the Home Buyer Tax Credit legislation and the associated IRS materials on it, but I’m not a “tax expert” and I don’t know the implications of some of the other issues you address. While I don’t think that your paying interest and getting deductions would make you an “owner” in the eyes of the IRS, that’s something you should absolutely check with an accountant.
Comment:
I purchased a 5 acre property from my father approx. 5 years ago without any improvemens. I now am building a house for myself as a primary residence on this property.
Would I still qualify since I purchased the land from my father a number of years ago?
Also, would the occupancy date be April 30 or June 30?
Hi @Eldon, I’m sorry but you’ll have to check with an accountant on that. The law is a little unclear about this type of situation. What I can tell you is that if you are building your own home, you need to be moved in by June 30th.
My situation is unique, so I am having a hard time knowing if I qualify for the $6500. I moved into a house in 2002, buying the property as Rent To Own. I actually purchased the property in 2006. Lived there until Oct. 2008. Which, would technically be living in for more than five years of the past eight. I still own that property and rent it out. I bought a property to flip, and lived in it for 4 months. I sold it, and am renting a duplex currently. I am about to purchase a home now. Do I qualify for the $6500?
Hi @Joseph, thanks for posting. That’s quite a lengthy ownership history. You’re definitely NOT eligible for a first-time credit, since you owned property that you lived in for four months within the past three years (if I understand that right), and you lived in that other home through October 2008. The question, as you put it, is whether you are a long-time homeowner. It doesn’t look like it. It depends on the nature of your rent to own contract. If you actually took title in some way as of 2002, then you’re fine. But if what you had was simply an agreement to buy the property at some future time, you probably did not take title. You should talk to your attorney to see what the nature of your ownership was. The tax credit legislation requires that you both own and live in the property for five consecutive years out of eight — living there for sixyears but owning for only two would not qualify.
I have a written contract signed on March 11, 2010. It is handwritten and have some edits where we crossed out, wrote in new numbers and all parties initialed. Will the government accept this binding contract or do I need to submit a “clean” contract with no scratch outs?
Hi @Grant, I have not seen anything in the law that defines the nature of the contract required, so I don’t think that a handwritten contract would be a problem. The IRS is going to be much more stringent about the closing deadline of June 30th, since lots of legal documents get generated at a closing that would document the closing date. I haven’t even seen anything that indicates how the IRS is going to enforce the contract deadline, since the contract itself is not something that has been mentioned as being required as part of the filing process.
Our question is do we qualify for tax credit. Lori and I only make 35,000.00 a year. I was told that you had to make 50,000.00 a year to be able to file long form.Am I right??????
Hi @David, I don’t know the answer to that. That’s something better directed to an accountant, or you can call the IRS directly at 1-800-829-1040 and ask them. The tax credit does not have a “minimum” income threshold, only a maximum.
I have owned home for 10 years. I went to buy grandmothers house nov 08 but found out is was so badly damaged we couldn’t move in or get a loan. We ended up getting a rehab loan and have been working on it since. Not sure if it will pass for a loan. If I get loan by April 30th. Will I be eligible for tax credit. Thanks
Hi @Carrie, thanks for posting. The loan doesn’t really matter. The issue is whether you have taken title to the property. If you did that in November 2008, then you wouldn’t be eligible for the tax credit in place at the time, since you owned your home for the previous ten years (the only tax credit at the time was for first-time home buyers). If you took title at that time, no credit. If you haven’t taken title yet, though, you could get in contract by April 30 and close June 30th, and if you are otherwise eligible the fact that you’ve been doing work on it for two years would not prevent you from getting a tax credit.
we stayed in ahouse for 3year and sold it and brought anew one are we qualify for any tax credit
Hi @shsrine, thanks for posting. I’m not sure if I follow the question, but if you’re saying that you stayed in a house that you owned for only three years, and those three years are within the past three years, then you would not qualify. You didn’t own long enough to be a long-time homeowner, but you owned too recently to be a first-time home buyer.
If my Father takes out a mortgage on his property he has paid in full to get cash and then gives the cash to me to buy a house. I purchase this home as a cash deal. The house is in my name, the mortgage is in his name and i sign a legal contract to pay that mortgage until i am financially stable enough to switch it over to my name. I have never bought a house, so i am a first time buyer. Am i eligible for the $8000 tax credit as long as i meet the deadline criteria?
Thanks in advance
Mikey B
Hi @Mikey, thanks for the question. Most of the information you gave me is not even material to whether you get the credit. If you otherwise qualify, and are a first-time home buyer, all that matters is whether you are on the title. This video we put up explains these issues.
Hello, we are about to build a house. Hoping to break ground in the next couple of weeks. The house we are living in we do own. We are building on the lot next door. Do we qualify for the second time home owner? We will demo the first house for address purposes. We were not sure if we do or not. We should be locked in the contract by next week, March 14th but the house won’t be finished till the end of June.
Thanks!
Hi @Annette, you don’t say whether you are building the home or you’re buying from a developer. Either way, though, you need to be closed and moved in by the end of June. If you otherwise qualify, you should be able to get the credit.
First time purchases of a cooperative apartment. Puchase was for memberhsip in the cooperative. Does this apply for the first time tax credit?
Hi @Marsha, yes, coops qualify.
Scenario;
Mary and John are engaged to be married June 2010. John owns home. John refinances home March 2010 and adds Mary to Deed and Mortgage.($76000) Mary has never owned a home. Is Mary eligible for the first time homeowner’s credit? If so, how much of the credit– $7600 or half would Mary be eligible for and what documentation wil be needed since no “closing papers” will be issued?
Teresa
Thanks for taking these questions. Here are the facts:
Wife purchased her home in Feb 2006.
We got married in July 2006.
We’re now selling her unit and purchasing a new one.
I’ve never owned a home.
Thanks for you time and attention,
Alex
Hi @Alex, thanks for posting. Unfortunately, you and your wife fall right smack into a marriage penalty situation, because your wife will not qualify. She bought the home in February 2006, with is fewer than 5 years ago, so she does not qualify as a long-time homeowner (and obviously not as a first-time home buyer). Although you would qualify on your own, you can’t qualify because of your marital status.
Question–my 80 yr old mom just closed on her purchase of a mobile home. She is still married, she lives in their home of 35 years and dad is in a nursing home (6 months now). do they still qualify for the step up credit? I am on the title and will be living there with her. I have also owned and lived in my home for 32 years would it be better for me to take the credit-I am widowed–thanks for your input.
Hi @Elisha, without knowing more, it’s tough to say whether you qualify. Mobile homes qualify, so that’s not a problem. And the fact that you and your mother both have lived (and I assume owned) a home for many years before this means that you meet the ownership history test. And if you are both going to own the home, and are both on the title, you both qualify and can split the credit in any reasonable manner. Whether it makes more sense for you or her to take the credit is a better question for an accountant. Good luck!
My husband and I purchased a home Nov 18, 2004 and sold June 4, 2009 which is 4 years 7 months. But I did move up to a more expensive home. Is there any way or exceptions to claim the $6500.00 tax credit? Thank you for your help.
Hi @Hollie, thanks for posting. Sorry, but the requirement is very strict that you must have owned the property for five consecutive full years, and as you say you’re a little short. The fact that you moved to a more expensive home is immaterial — indeed, it’s not a requirement of the tax credit. I don’t know of any exceptions that would help you. Sorry.