New Home Buyer Tax Credit- More Q’s & A’s

Posted on | November 30, 2009 | 2 Comments

A Question from one of Matt’s readers-

My girlfriend and I are both planning to purchase my parents house. I know I am not eligible for the tax credit, but unsure about my girlfriend. So can she claim the credit even if she is jointly purchasing the house with someone who is a direct relative of the seller? If she cannot, where is this spelt out? Having a hard time finding information for this scenario.

An answer from Matt’s friend and exceptional loan broker, Mickey Brooks- 

Your question is answered by one of several documents available from various associations involved in the residential Real Estate industry and other real estate experts.   Here is a question I was previously asked along the same lines and my answer:

 Q – What is the definition of a first-time home buyer?
A – The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.   For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.   So, it is very clear for married buyers.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.

However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter, or an unmarried couple wishes to purchase a home together and one of them has owned a home in the past three years.  In the unmarried couple’s case, the partner who has not owned a home in the last three years and is not related to the seller would file as a single taxpayer and have their partner allocate the credit to them.

 You can further investigate the proof that your girlfriend is eligible by looking at the IRS form used to request the credit – IRS Form 5405.   Here is a link to that document:  http://www.irs.gov/pub/irs-pdf/f5405.pdf

Thanks for your question!

 Best regards,

Mickey Brooks
Mortgage Planner
JLB Mortgage Group
11769 Whisper Bay Ct
Carmel, IN  46033
317.218.0283 (Office)
317.218.0291 (Fax)
888.249.4003 (Toll Free)
mbrooks@jlbmortgagegroup.com
www.jlbmortgagegroup.com

Comments