Terry O Posted May 14, 2009 Report Share Posted May 14, 2009 I have a client who wants to purchase a multi family residence in Bflo, NY (HUGE 100 yr old single turned into 6 units) but will be living in one. Does he qualify, and if so, is it a pro-rated credit due to the % of personal use??? Quote Link to comment Share on other sites More sharing options...
mcb39 Posted May 14, 2009 Report Share Posted May 14, 2009 . Can I apply for the credit if I bought a vacation home or rental property? A. No. Vacation homes and rental property do not qualify for this credit. Quote Link to comment Share on other sites More sharing options...
Terry O Posted May 14, 2009 Author Report Share Posted May 14, 2009 Thanks - -it was right there in front of me - hiding in plain sight! Quote Link to comment Share on other sites More sharing options...
Catherine Posted May 14, 2009 Report Share Posted May 14, 2009 Thanks - -it was right there in front of me - hiding in plain sight! Always the best place to hide, if you can manage it. I've found that lots of tax rules hide there.... :lol: Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted May 14, 2009 Report Share Posted May 14, 2009 My take on this is that he bought two properties ... a rental with five units and a personal primary residence. The credit of 10% of the personal residence cost could be taken if he otherwise qualifies. taxbilly Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted May 14, 2009 Report Share Posted May 14, 2009 I also think he will qualify if it's going to be his main home, in this case it is an apartment and he should only take 1/6 of the credit. From the IRS form 5405 instructions: Main home. Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence. Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted May 14, 2009 Report Share Posted May 14, 2009 Why 1/6th of the credit? The credit only applies to the personal residence and not prorated across the entire property. taxbilly Quote Link to comment Share on other sites More sharing options...
Terry O Posted May 14, 2009 Author Report Share Posted May 14, 2009 Sooooooooooo let's make it easy Assume: all 6 apartments are the same size $120,000 purchase price Max credit allowed is $8,000/6 = $1,333 credit ??? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 14, 2009 Report Share Posted May 14, 2009 $120K/6 = 20K price of home apartment. Credit is not divided by six, the price is. Then the credit is calculated based on that price of the single apartment. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted May 15, 2009 Report Share Posted May 15, 2009 So the credit would be 2K, 10% of the purchase price? If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $7,500 ($8,000 if you purchased your home in 2009) or 10% of the purchase price. See Purchase price on page 3. Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted May 15, 2009 Report Share Posted May 15, 2009 Bingo! taxbilly Quote Link to comment Share on other sites More sharing options...
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