First Time Home Buyer Tax Credit, Even though it is about to expire..

Here are a few items for you to read about the First Time Homebuyer Credit as it applies to married couples:

• An article from CBS Money Watch is attached. I have highlighted the critical section. The $6,500 they are referring to is the so called ”Move Up” credit. More details about that credit can be found herehttp://www.federalhousingtaxcredit.com/faq2.php#1. I am not sure but don’t think you would qualify for this credit. Let me know your thoughts. I don’t think you have both lived in the old house for five years.
• IRS Instructions to Form 5405, which is the form to claim the credit. I have highlighted the critical section.
• The actual Internal Revenue Code Section 36(c)(1) (the law) shown below.
• Scenario 4 from the IRS Websitehttp://www.irs.gov/newsroom/article/0,,id=206294,00.html shown below. Other scenarios make the same point on that page.

I hope this information is helpful. Again, I am not trying to keep you from receiving any benefits. It is my job to get you all the benefits you are entitled to. At the same time it is my job to properly inform you of my understanding and knowledge to keep you from being audited by the IRS. They are watching this credit very close and auditing it very frequently. Please let me know if you have further questions and I will be happy to answer them for you.

Section 36(c) Definitions. For purposes of this section–
(1) First-time homebuyer. The term “first-time homebuyer” means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.

S4. If husband and wife wanted to sell the home that the wife owned when they got married, and the husband had not owned a home within the past three years, could he qualify as a first-time homebuyer for the credit even though the wife would not qualify?

A.    No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior three years, neither taxpayer may take the first-time homebuyer credit. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer’s spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. The husband may not take the credit even if he filed on a separate return.

Related posts:

1. First Time Home Buyer Tax Credit.. Will they extend the tax credit?
2. Only 100 Day’s left for the Home Buyer Tax Credit
3. First Time Home Buyers $8000 Tax credit running out of time..
4. First Time Homebuyer Tax Credit to be extended..
5. The Extended Home Buyer Tax Credit: The Basics for REALTORS, Homebuyers, and Home owners from the National Association of REALTORS.