Chowdahead Posted February 27, 2009 Report Share Posted February 27, 2009 I have a client who purchased a home with his girlfriend in 2008. They are both listed on the 1098-INT. He has never owned a home before. But she has owned a home before within the last 3 years. They are not married, so he is filing his return as Single. She is not on his return. Does he qualify for the $7500 credit (aka loan)? Does he have calculate the credit at 50%? IRS Website doesn't mention anything about non-married co-owners: The Housing and Economic Recovery Act of 2008 provides a new refundable tax credit for individuals who are qualified first-time homebuyers of a principal residence in the United States. The provision applies to a principal residence purchased by the taxpayer on or after April 9, 2008, and before July 1, 2009. Homebuyers who qualify are allowed a one-time credit against their income tax for the year of purchase. Unlike some past credits, this one must be repaid over a 15-year period. As a result, the new tax credit works like an interest free loan. You take the full credit in either 2008 or 2009, and then repay the credit amount in equal payments over 15 years, with no interest charges. First-Time Homebuyer A "first-time homebuyer" is any individual (and spouse if married) who had no present ownership interest in a qualifying principal residence during the 3-year period ending on the date of purchase of the principal residence for which a first-time homebuyer credit is being claimed. Exceptions to definition of First-Time Homebuyer The following taxpayers do not qualify for the first-time homebuyer credit: * A homebuyer who qualifies for the District of Columbia First-time Homebuyer Credit in the year of purchase or in any prior year * A homebuyer whose home was financed by the proceeds of tax-exempt mortgage revenue bonds * A homebuyer who is a nonresident alien * A homebuyer who disposes of the residence (or it ceases to be the taxpayer's principal residence) before the close of a taxable year for which a credit otherwise would be allowable Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted February 27, 2009 Report Share Posted February 27, 2009 http://www.irs.gov/newsroom/article/0,,id=187935,00.html TAXBILLY Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted February 27, 2009 Report Share Posted February 27, 2009 http://www.irs.gov/newsroom/article/0,,id=187935,00.html TAXBILLY Thanks once again TAXBILLY. Out of curiosity I went to the site and in doing so found an answer to a question that I had been wondering about. A client of mine is about to close escrow on a home and we have discussed over the last couple of weeks about the 8,000.00 credit. We had already filed his 2008 return and I was wondering if they would have to wait till next year to claim the credit or if I could ammend their 08 return and get them their money faster. This was actually answered in the article you sited. I am going to have a very happy client! Deb! Quote Link to comment Share on other sites More sharing options...
Chowdahead Posted February 27, 2009 Author Report Share Posted February 27, 2009 Q: If two unmarried people buy a house together, how do they determine how much each may take of the credit? A: Two unmarried individuals buying a principal residence may allocate the credit among the individual owners in any reasonable manner. The total amount allocated between the owners may not exceed the smaller of $7500 or 10% of the purchase price of the house. Still sounds vague to me. Especially the phrase "may allocate the credit among the individual owners in any reasonable manner". Does this mean that since he is a first-time home buyer, and it's his return, he can reasonably take the $7500? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 27, 2009 Report Share Posted February 27, 2009 Yes. It seems unreasonable, but that is how the law was written. He gets the 'loan' treatment, for purchase in 08, of course. Quote Link to comment Share on other sites More sharing options...
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