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Sandy >^..^< -
Thanks for the link
I notice under Current Homeowner Definition for eligibility it says "Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years", which seems to indicate the necessity of selling the home. I can't find any information to confirm or refute that the house must be sold, only that the new home must be your primary residence.
The TaxBook also has a nice chart in the update service section. The chart compares all three credits and has more information such as recapture rules, etc.... -
TheTaxAuthority Update says:Originally posted by Jesse View Post
Author’s Comment. The law does not say the old home must be sold. It says the old home must be used as a principal residence during the qualifying period, and the new home must be used as a principal residence during the first 3 years after purchase. Thus, a taxpayer could convert the old home into rental or investment property after purchasing the new home and qualify for the credit.Comment
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Thank you.
You're correct. TTB link is much better than mine.Sandy >^..^<Comment
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I just had the following question posed to me.
Two unrelated adults are living in a home owned by person A. Person B is not on the title or the mortgage and have never owned a home. Person B is planning to buy a home and use the $8k FTHBC. Person A intends to move into the new home as well. Person "A" wants to know if they qualify for the $6,500 credit on the same home. They would otherwise qualify. The two credits surely can't be used on the same home. I can't see anything in the instructions so far that says that they can't but my gut tells me they can't.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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I think TTA 2/2/2009 update answers that. Before there was an $8,000 credit, IRS came out with Notice 2009-12 on how to allocate the $7,500 credit between two unmarried purchasers.Originally posted by DaveO View Post
It then gives several examples.Under Section 36(b)(1)(C), the total credit allocated between unmarried taxpayers who purchase a principal residence cannot exceed $7,500. For purposes of this rule, Notice 2009-12 says the first-time homebuyer credit may be allocated between the taxpayers using any reasonable method. A reasonable method is any method that does not allocate a portion of the credit to a taxpayer not eligible to claim that portion. A reasonable method includes allocating the credit between the unmarried individuals eligible to claim the credit based on:
• The individual’s contributions towards the purchase price of a residence as tenants in common or joint tenants, or
• The individual’s ownership interest in the residence as tenants in common.
Of course it is not identical to your question, but it is the same principal. The $6,500 credit for long-time owners is not in addition to the $8,000 credit. It is a reduction of the $8,000 credit when long-time homeowner is treated as a first time homebuyer. Thus, if one unmarried taxpayer qualifies for the $8,000 credit, and the other qualifies for the $6,500 credit, and they both jointly purchase a home, the maximum $8,000 would have to be allocated between the two, similar to the method described in Notice 2009-12.
IRS will probably come out with an updated notice to take into consideration all the new rules.Comment
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I went ahead and downloaded those charts. For my personal use... I wanted just a 1 pg. document I could easily glance at so I went ahead and rearranged everything. It's uploaded on my site so feel free to download my "rearranged" version.
~MariaMaria R., CRTP
Los Angeles, CA
Software Used: ProSeries since 2008Comment
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Thank you
Maria, you're the best. Thank you for sharing!Comment
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No prob, I'm happy to contribute!
Maria R., CRTP
Los Angeles, CA
Software Used: ProSeries since 2008Comment
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Where's the TTB link to the Homebuyer's credit chart?Comment
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Another question, one chart says closing deadline is November 30th for this year. Now I see purchase dates of before Nov 7 and after Nov 6th in a chart comparing all three. Did the new law change 2009 homebuyer credit date of Nov 30?Comment
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{Where's the TTB link to the Homebuyer's credit chart?}
I can't post the link because I don't have my TTB password with me right now but you should be able to click on "TheTaxAuthority Update Service" link at the top of the page and input your password and view the latest update.
{Another question, one chart says closing deadline is November 30th for this year. Now I see purchase dates of before Nov 7 and after Nov 6th in a chart comparing all three. Did the new law change 2009 homebuyer credit date of Nov 30?}
The Worker, Homeownership and Business Assistance Act of 2009 was signed into law Nov. 6th, 2009 and it extends and expands the FTHB Credit.
Here's a link to to irs.gov for more info: http://www.irs.gov/newsroom/article/...204671,00.html
~MariaMaria R., CRTP
Los Angeles, CA
Software Used: ProSeries since 2008Comment
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This is an example of a retroactive provision that wipes out anything the taxpayer thought they could do if done by the November 30th deadline.Originally posted by JenMO View Post
For example, a college student claimed as a dependent on his parent’s return is set to close on a house today, November 14, 2009. Under the old rules, he was told he could get a refundable $8,000 credit as long as the closing date on the purchase was by November 30, 2009. So he went out, found a house, signed the purchase agreement on October 14, 2009 to purchase a house.
Now all of a sudden, the new law retroactively says his plan will no longer work. He no longer qualifies for the $8,000 credit since any home purchased by a dependent after November 6, 2009 no longer qualifies.
What if you were the one who originally told him a few months ago prior to the law change that he would get the credit? What if he does not know about the new law change, and next spring when he comes in to have his taxes done, he is expecting to get the credit, based on what you told him?
Isn’t it fun when Congress changes the rules on us in the middle of the game?Comment
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What about this?
Taxpayer bought his current home in June 2007.
But he had been living there for 7 years (since it was his rental).
So he has owned his current home for less than 5 years but he has been living there fore more than 5 years.
I think it fits the "Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years" requirement.
Anyone agrees or disagree?Comment
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