Repeat buyer credit

[Margaret CPA in OH]

A little personal interest here - my son and wife closed on their home Friday, Nov. 6. He had owned and lived in his prior home for 5 years, 6 months. The purchase was listed on the county website as date of conveyance Nov. 10. I looked at the new law, faq's, and other places but cannot find a definitive answer as to what "the date" should be. Any chance they could qualify for the $6500 credit? Or should we just sigh and think, "too bad?"

[mlinder42]

Under the new law you must include the HUD-1 when asking for the credit.The law says after 11/06/2009 so if the Hud-1 is dated 11/06 I would say it does not qualify.

[Margaret CPA in OH]

Thanks for the confirmation. I just wasn't positive whether it was the county date or the HUD-1 date. So they lose by a week. Oh well, that wasn't a consideration when they decided to buy. It hadn't even come up in Congress. It just would have been so nice for them. Perhaps it will help with selling their other house now subsidized by the bank of Mom and Dad until it sells!

[jainen]

>>if the Hud-1 is dated 11/06 I would say it does not qualify.<<

On this forum I often take the more conservative position, but in this case I will argue FOR the taxpayer. The Settlement Statement is ONLY about costs, not deeds. The county looks at the deed itself, and deeds don't count until they have been delivered. It is normal for the settlement to be entirely in place BEFORE the actual transfer.

Think about this. The papers, including the mortgage and deed, were all signed on Friday, the 6th. That's what we call settlement, so that's the date on the Settlement Statement. Next working day, the escrow officer did an updated title search to make sure nothing had changed. Only then would the bank fund the loan. And only after the escrow officer had the money in hand did the seller's escrow instructions allow release of the deed, which wasn't until Tuesday the 10th. So that's the date of conveyance, when the money was paid over and title was transferred by recording the deed.

IRC Section 36 (this credit) defines purchase as "any acquisition." In my experience, nobody never acquires nothing until they fork over the cash.

[Don in Upstate NY]

Think about this. The papers, including the mortgage and deed, were all signed on Friday, the 6th. That's what we call settlement, so that's the date on the Settlement Statement. Next working day, the escrow officer did an updated title search to make sure nothing had changed. Only then would the bank fund the loan. And only after the escrow officer had the money in hand did the seller's escrow instructions allow release of the deed, which wasn't until Tuesday the 10th. So that's the date of conveyance, when the money was paid over and title was transferred by recording the deed.

But of course this varies by local custom. In upstate New York there is no "escrow" procedure. On the date of the "closing" the principals, the bank (if any) and their attorneys gather around a table and sign all the paperwork. The funds are transferred, everyone gets paid, and the signed deed and the keys are delivered. If the closing is physically at the court house (which often provides facilities for this purpose) the deed is recorded within minutes.

[kcjenkins]

So clearly, you should research why the dates are different. It could be that the 10th IS the correct date.

[Margaret CPA in OH]

Well, it isn't time to file the return just yet so I will keep checking. However, my son checked the WSJ and found: ""Taxpayers taking the credit will also have to furnish proof of purchase. According to Robert Dietz of the National Association of Home Builders, this will usually be a HUD-1 form."

Since the word "usually" is present, I will keep my eyes open!