Firstime homebuyer credit Married couple

[GTS1101]

I have a client in California (which is a community property state) whose husband owned a home for the last three years. They moved out of that house and rented it out in 2008. Only the husband was on the title and the loan. After that they bought a new house together in 2008 as their principal residence. The wife has never owned before. I know the husband does not qualify for the first time home buyer credit but does the wife qualify? Is the wife entitled to half of the 7,500 since she is a first time home buyer and he isn't? Or does she qualify for the whole 7,500? The IRS instructions are not that clear. What if they filed MFS? Or because it is community property state both have to be first time homebuyers in order to qualify for the credit?

Thanks!

GTS1101

[joanmcq]

No. Being married to a homeowner disqualifes both. Non-marrieds are fine.

[AccTaxMan]

I agree with joanmcq. They have made it very clear that BOTH husband and wife has to pass the test in order to qualify.

[equinecpa]

How about taxpayers who are divorced? I have a client who got divorced in Dec 2008. His wife owned a home prior to their marriage, and owned that home throughout their marriage, and still owns the home. He never owned a home. Do you think he qualifies?

[GTS1101]

I believe that your taxpayer would qualify if divorced in Dec 2008. If he bought a home in Dec 2008 after the divorce is final, he is filing as single or HOH if he has dependents and therefore because he has not had any ownership interest in another home in the past three years I believe he would qualify.

GTS1101