First-time home-buyer credit - Mobile Home

[Jesse]

Taxpayers owned a cheap double-wide on a rented lot in a trailer home park where they lived until they saved enough for a down payment for a "real" home. They are closing next week on a new home. It's my understanding if the double-wide is to be used as a primary residence it would qualify for the FTHBC, therefore on the same premise the double-wide that was used as their primary residence will also disqualify them from the FTHBC on the purchase of their new home. Anyone disagree?

I believe my answer to be yes it disqualifies taxpayers but thought maybe someone could prove me wrong.

[taxfun]

It depends

Sec 1.121-1 Property used by a taxpayer that is treated as personal property under local law would not prohibit the owner.from taking a first time home buyer credit on a new home. Here in our part of the counyry, mobile homes that are located on a rented lot space and do not have a permanent foundation, are not treated as real estae - but as personal property.

[Jesse]

Here too, the double-wide is personal property but as you stated, this does not prohibit the owner from taking the first time home buyer credit. With that said, ownership in Sec 1.121-1 property does disqualify them. Sometimes it helps to "think out loud". Thanks for the reply

[Jesse]

Interesting

Taxpayers are having HRB amend their 2008 tax return for the FTHB $8,000 credit. Preparer told taxpayers that since the double-wide was on a rented lot and not their own land it would not be considered previous home ownership, so upon purchase of the new home they are entitled to the $8,000 credit.

I politely agreed to disagree, but am doubting myself......AGAIN!