Client bought house in March 2009. In March 2006 she was married and not living in the marital home. In Oct 2006 she got divorced and in Dec 2006 her name came off the marital home. My feeling is she can't claim FTHB credit. Anyone disagree.
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I agree she would NOT qualify for the FTHB credit. -
I agree
She is not eligible for the FTHB Credit.
DustyComment
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I disagree
You stated that in March 2006 (three years prior to the purchase) she did NOT occupy the marital home as her principal residence. Therefore, even though she had an ownership interest in the marital home with her ex at the time it was NOT her principal residence and she would qualify.I would put a favorite quote in here, but it would get me banned from the board.Comment
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TheTaxBook says on page 11-3 fourth item down:"Must NOT have OWNED
a principal residence in the U. S. during the 3 year period prior to the purchase of the
home." She DID own a home during this 3 year period and is therefore NOT qualified
for the FTHB credit.Comment
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Hmm
More info
Longtime HO buyer
Purchase date prior to 11/6/09 - so doesn't qualify
FTHBQ. Who is considered to be a first-time homebuyer?
A. Taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase are considered first-time homebuyers. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.From IRS website2.What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, IRS Notice 2009-12 allows unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.S6. I have been estranged from my spouse for over three years and file married filing separate. I don’t know if my spouse has owned a main home in the last three years, but I have not. If I buy a house in 2009 that otherwise qualifies for the first-time homebuyer credit, can I claim the credit?
A. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. If your spouse has not owned a main home in the last three years, then you may claim the credit.It appears to claim FTHB it goes more to ownership interest than it does occupany.S7. I am separated from my spouse and considered unmarried, and qualify for the unmarried head of household filing status. My spouse has owned a main home in the last three years, but I have not. If I buy a home on May 1, 2009, that otherwise qualifies, can I claim the first-time homebuyer credit?
A. No. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The taxpayer may not take the credit even if filed on a separate return.
SandyComment
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I believe she is tainted
by the previous marriage.
From ST's post.
"marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The taxpayer may not take the credit even if filed on a separate return."
I don't believe ownership in itself is the problem. The fact that it was owned and a principal residence of her ex-husband is imputed to the wife.Comment
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I believe she qualifies, and here’s why:
1. Marital status at time of purchase is controlling. She was married in the past, and was separated in the past, but at the time of purchase she was single. (If she weren’t divorced then, yes, we’d need to look at spouse’s status, and that would taint her status. Note Sandy's quotes are for still-married people, not divorced or single people.)
2. Yes, status of one spouse imputes same status to other spouse, but there is no spouse to consider in this case, as marital status on purchase date is what controls.
3. She did have an ownership interest in a home from Mar 06- Oct 06, but it was not her principal residence. For disqualification, she’d need to have owned her principal residence, which she did not.
4. So, for the 3 yr look back period (Mar 06-Mar 09) she did not own her principal residence. And there is no spouse as of date of purchase to take into account.
So what do you guys think?
I do agree these scenarios are getting difficult to work through. I had one couple yesterday that was sure they’d get the $6,500. Recently married, he would have qualified, but she did not. Their appraiser told them they’d qualify. (
) They were dejected when I reasoned otherwise. They thought they had some loopholes- i.e. she was not on deed or mortgage; or couldn't they just file MFS? No go. These are getting tougher to work through, as each one is unique.
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You are entirely correct, Ann. A simpler way to put it is that a "house is not necessarilyOriginally posted by BP. View PostI believe she qualifies, and here’s why:
1. Marital status at time of purchase is controlling. She was married in the past, and was separated in the past, but at the time of purchase she was single. (If she weren’t divorced then, yes, we’d need to look at spouse’s status, and that would taint her status. Note Sandy's quotes are for still-married people, not divorced or single people.)
2. Yes, status of one spouse imputes same status to other spouse, but there is no spouse to consider in this case, as marital status on purchase date is what controls.
3. She did have an ownership interest in a home from Mar 06- Oct 06, but it was not her principal residence. For disqualification, she’d need to have owned her principal residence, which she did not.
4. So, for the 3 yr look back period (Mar 06-Mar 09) she did not own her principal residence. And there is no spouse as of date of purchase to take into account.
So what do you guys think?
I do agree these scenarios are getting difficult to work through. I had one couple yesterday that was sure they’d get the $6,500. Recently married, he would have qualified, but she did not. Their appraiser told them they’d qualify. ( ) They were dejected when I reasoned otherwise. They thought they had some loopholes- i.e. she was not on deed or mortgage; or couldn't they just file MFS? No go. These are getting tougher to work through, as each one is unique.
a home".
One of my clients, single now, still owns a house that her ex spouse occupies as his
principal residence, but she had split from him back about 2002. Their divorce wasn't finaly until 2007, but she's single, that house she still owns was not her personal residence, so she qualified for the 8,000.ChEAr$,
Harlan Lunsford, EA n LAComment
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ChEA$
I would disagree with you.
"One of my clients, single now, still owns a house that her ex spouse occupies as his
principal residence, but she had split from him back about 2002. Their divorce wasn't finaly until 2007, but she's single, that house she still owns was not her personal residence, so she qualified for the 8,000."
The IRS says that if one of the spouses owns a home both spouses own the home.
S6. I have been estranged from my spouse for over three years and file married filing separate. I don’t know if my spouse has owned a main home in the last three years, but I have not. If I buy a house in 2009 that otherwise qualifies for the first-time homebuyer credit, can I claim the credit?
A. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. If your spouse has not owned a main home in the last three years, then you may claim the credit.
S7. I am separated from my spouse and considered unmarried, and qualify for the unmarried head of household filing status. My spouse has owned a main home in the last three years, but I have not. If I buy a home on May 1, 2009, that otherwise qualifies, can I claim the first-time homebuyer credit?
A. No. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The taxpayer may not take the credit even if filed on a separate return.
While these are not the exact scenario you posted I believe they state that if one spouse owns a home both are considered to own the home.
DustyComment
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And the reason those are not the same scenario as my client, is that my client is not now the spouse of her ex husband. All those you quoted are for people still "spice". (grinOriginally posted by Dusty2004 View Post
IOW, after the divorce, the two are not spouses.ChEAr$,
Harlan Lunsford, EA n LAComment
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ChEA$ - Agree - partially
I agree that they are not spouses but when they were spouses one of them owned a home and in doing so both of them owned a home within the past 3 years.
DustyComment
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If they are not spouses at the time of purchase, there's no need to consider the home ownership of any former spouse. Remember, it is marital status on the date of purchase that governs.Originally posted by Dusty2004 View PostComment
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For there history it counts
If the owned a home in the past 3 years is what matters. If they were married 2 years ago and their spouse owned a home at that time they are considered to have owned a home at that time.Originally posted by BP. View Post
S7. I am separated from my spouse and considered unmarried, and qualify for the unmarried head of household filing status. My spouse has owned a main home in the last three years, but I have not. If I buy a home on May 1, 2009, that otherwise qualifies, can I claim the first-time homebuyer credit?
A. No. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The taxpayer may not take the credit even if filed on a separate return.
The important part of this is "marriage (and legal separation) imputes ownership of a previous home upon the other spouse."
They were married 2 years ago. Their spouse owned a home. It is imputed they own a home also.
DustyComment
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The ability to file as HOH (considered unmarried) does not negate the fact that the person in the example IS still married. I agree with BP and the others. The divorced person, as long as he or she did not reside in the ex-spouse's home in the previous three years, did not own a PRINCIPAL residence in the three year qualifying period, and was not married at the time of purchase, and thus no imputed ownership exists.Comment
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