first time home buyer elgibility

[kdecocpa]

single taxpayer "A" is eligible for the first time home buyer credit. In order to buy the home he wants his father ("B") co-signs the loan. On the closing statement they are BOTH listed as "The BORROWERS". According to the IRS website, BOTH being listed on the MORTGAGE does not disqualify the son (Taxpayer "A") from receiving the full $8,000 credit.

If the father is listed on the title, does that disqualify the son from receiving the credit?

Since the father is listed on the closing statement as one of the "BORROWERS", and the IRS is requesting a copy of closing statements, is a seperate explanation adviseable?

The son will be paying 100% of the mortgage payments and is the ONLY person living in the house.

Anyone have insight on this situation....able to provide source?

Thank you,

Ken

[Lion]

Irs

IRS web site provides Q&A with a scenario covering two unmarried purchasers.

[kdecocpa]

First time home buyer and FATHER

Lion, thank you for your post. The IRS Q & A that I have found indicate that the son gets the full credit even if the father participates in the MORTGAGE. I get that.

But is that 100% the same as OWNERSHIP? The father's name will appear on the title, which would mean ownership, unless there was an IRS exception for this purpose. Am I missing something here? Surely there are a LOT of cases exactly like this...

[Lion]

Scenario 2

S2. Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?

A. Yes. Taxpayer B is not a first-time homebuyer and cannot claim any portion of the credit, but A may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as Taxpayer A's primary residence.

[kdecocpa]

First Time Home Buyer

That scenario addresses the MORTGAGE.....what about DAD being on the TITLE?

[solomon]

That scenario addresses the MORTGAGE.....what about DAD being on the TITLE?

The son is the beneficial owner with the burdens and benefits of ownership which will qualify him for the credit.

Beneficial ownership would include such rights and obligations as: possession, obtain legal title upon full payment of the purchase price, construct improvements, pay property taxes, risk of loss, insure and maintain the property.

[Jesse]

In my opinion

Son would be eligible for 100% credit

Q. If two unmarried people buy a house together, how do they determine how much each may take of the credit?

A. IRS Notice 2009-12 provides guidance for allocating the first-time homebuyer credit between taxpayers who are not married.

http://www.irs.gov/pub/irs-drop/n-09-12.pdf

Example 4.
A and B each contributes $50,000 towards the $100,000 purchase price of a residence and owns a one-half interest in the residence as tenants in common. Under § 36(b)(1)(A), the allowable credit is not $10,000 (10 percent of the purchase price) but is limited to $7,500. However, B is not a first-time homebuyer within the meaning of § 36(c)(1). Therefore, no portion of the credit may be allocated to B because B is not eligible to claim any portion of the credit. A may claim the entire allowable $7,500 credit.