Can you take another FTHB question?

[BP.]

Don't think an FTHB question has come up here lately. Anybody up for this one?

He moved out of their jointly owned home in 11/05. So he did not own HIS main home (he rented an apt to live in.)

They divorced in 10/08, and she got the house. So he has no spouse AT THIS TIME to consider in the 3 yr look back period.

Of course, during that 3 yr look back period, he did have a spouse who owned her main home.

Will he qualify as FTHB for his upcoming home purchase?

Not thinking so clearly on this one. Thanks for any input!

[AuditorTurnedGood]

Were they MFS during the time between seperation and divorce? If so, it might be easier to say he qualified, since it appears that the house was not his principal residence. At the end though, I have the same question you do - did being married to someone who owned, along with him, and interest in her principal residence kill his eligibility?

[solomon]

The part of §36 dealing with marriage was not amended under R & R Act.

36(c)(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.

As you describe it, he is disqualified because his spouse owned it during the look back period .

[S T]

More Info

There are some scenarios posted at an IRS website

http://www.irs.gov/newsroom/article/0,,id=206294,00.html

Take a look at S5-S7 to see if those scenairos fit your taxpayer.

I question the fact you presented that "he" moved out in 11/05 and then divorced in 10/08
Don't you have to look to ownership - if home was not sold-he would still be on title and as such been shown as an owner which the property tax rolls probably still indicated personal residence?

Muddy Waters!

Hope this asissts

Sandy

[JohnH]

This is another of those clients I'd probably refer to HRB.
Not worth the hassle...

[BP.]

Thanks for the replies!

ATG- Yes, he filed MFS between separation and divorce, with a different address than spouse.

ST- Yes, ownership has to be looked at, and he did have ownership, but it was not his primary residence, and I'm not sure how property tax records could reflect whether it was or not. Thank you for the link to the IRS scenarios. The three you referenced that are close to my case all deal with separated spouses. Maybe for a reason, ie- no marriage at the time of purchase means no spouse to look back on??

solomon- Thank you for the reference. Many times in the scenarios ST linked to, the language states that eligibilty is determined at the time of purchase. At the time of purchase, this guy will be unmarried.

Your paragraph says " . . . any individual, and if married, such individual's spouse . . . " Well, this guy is unmarried. There is no spouse at the time of purchase. And there is no mention of taking into consideration the status of any former spouses. That is, you're saying he is disqualified because his spouse had ownership. Actually, his former spouse had ownership. That's where the small, but potentially significant difference is.

I originally told this client he wasn't eligible, but I began to second guess my opinion, and I think I'm still in the second-guessing stage.

What do you think?
Cheers, All!

[OtisMozzetti]

is it really clear?

The part of §36 dealing with marriage was not amended under R & R Act.

..."and, if married, such individual's spouse"...

As you describe it, he is disqualified because his spouse owned it during the look back period .

Well, he's not married; so it doesn't seem at all clear that ownership by his prior spouse during the preceding 3 years makes any difference.

[solomon]

There is no spouse at the time of purchase. And there is no mention of taking into consideration the status of any former spouses. That is, you're saying he is disqualified because his spouse had ownership. Actually, his former spouse had ownership. That's where the small, but potentially significant difference is.

I originally told this client he wasn't eligible, but I began to second guess my opinion, and I think I'm still in the second-guessing stage.

What do you think?
Cheers, All!

I think your reading of §36 is better than mine - the purchase date is determinative .