Home Purchase Credit

[Crank]

TP and girlfriend jointly purchased a home in 2009 within the specified credit dates. TP was a long time home owner, Girlfriend had never owned a home.

Since they are not married and filing seperate returns would she qualify for her 50% ownership in the home. I havent really dug into this and thought I would pick some brains here first.

Here is the IRS website discussing this and similar scenarios.

http://www.irs.gov/newsroom/article/0,,id=206293,00.html

Input is greatly appreciated!

Thanks

John :)

[Terry D EA]

These situations can get sticky at times. I am of the opinion that each is 50% owner in the home. That in and of itself doesn't address the FTHBC and would be two separate issues. However, if you are trying to qualify them for the FTHBC, then you need to allocate it as outlined here:

A. Co-purchasers who are not married may allocate the credit using a reasonable method. A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit. The maximum credit for a taxpayer who qualifies under the long-time resident test is $6,500, and the maximum credit for a taxpayer who qualifies under the first-time homebuyer test is $8,000. One example of a reasonable method is to allocate $6,500 to the long-time resident homebuyer and $1,500 to the first-time homebuyer. (12/14/09)

This makes perfect sense to me to do the allocation this way. I hope this is what you were looking for.

[Crank]

Thanks Terry!

Yes, I read that section and I'm favoring this allocation.

Based on 50% ownership I would assume $3250 for the long-time resident and $4000 for the first-time homebuyer for a total combined credit of $7250 which seems reasonable and doesnt appear to allocate any portion of the credit to a taxpayer who isnt eligible.