New $6500 FTHBC

[Nashville]

The "First Time" segment of the topic may be a misnomer.

Hence my question. Client says he has read up on the new $6500 version of FTHBC. Which is to his credit since I haven't done so. I told him I would get a definite "yes" or "no" shortly.

Owned his home jointly with his wife for 20 years, but moved out in 2006 in the process of divorce. Divorce was final in Feb of 2009 and ex-wife received the house, at which time he relinquished title to the house. Original cost $40,000, FMV at time of divorce $150,000.

Client acquires title to new home (for $373,000) in April of 2009.

Does client qualify? I doubt it, but I haven't seen enough of the definitions in the new legislation to know.

[Jesse]

Very informative

From The TaxAuthority Update Service:

Long-time residents of the same principal residence. The new law extends the credit in the case of certain taxpayers who already own a home. Effective for purchases after 11/6/2009, an individual (and spouse) who has maintained the same principal residence for any 5-consecutive year period during the 8-year period ending on the date of the purchase of a subsequent principal residence is treated as a first-time homebuyer. The maximum allowable credit for such taxpayer(s) is the lesser of 10% of the purchase price of the home, or $6,500 ($3,250 MFS).

No, your client bought the home too early in 2009.