First time Home buyer? Hmmm

[RZellers]

Client's wife committed suicide in 2008. She owned a home while they were married. His name was never on the house or the loan. Upon her death, the property was worth less than what was owed (because of the economy), so the bank wouldn't let him just take it over, they wanted a full refi... which wasn't going to happen. So the house went back to the bank. A year later (in 2009) he bought a home in his name.

Now, it seems like he shouldn't be eligible for the credit, but the wording on the form makes me wonder. From the 5405, Part II, Line 3... "A first-time homebuyer is an individual (and that individual's spouse if married) who has not owned another main home during the 3-year ending on the purchase blah blah.."

"IF" married. He's not married. That seems to make it sound like he's eligible. And in the tax software, I checked off the box that a spouse owned a home on the last 3 years, but it seems to ignore that box either way, presumably because he's filing single.

And he wouldn't qualify for the $6500 as he bought in August of 2009.

It is my understanding that marriage imputes ownership. So even tho they weren't married, he's considered to have an interest in the home she owned... especially in PA.

Think there's anyway to get this guy the credit?

[BP.]

He's not married at time of purchase, so he qualifies. Luckily, since spouse died in 2008, he can take Single filing status. Since he's single, no need to impute ownership of former spouse.

I have one whose spouse died in 2009; they were separated, not legally, so she has to take filing status of MFS or MFJ. If we can't get her filed MFJ, she loses $4,000 of the FTHBC. (They both qualified as they sold their residence and separated over three yrs prior to purchase.)

[spanel]

He's not married at time of purchase, so he qualifies. Luckily, since spouse died in 2008, he can take Single filing status. Since he's single, no need to impute ownership of former spouse.

I have one whose spouse died in 2009; they were separated, not legally, so she has to take filing status of MFS or MFJ. If we can't get her filed MFJ, she loses $4,000 of the FTHBC. (They both qualified as they sold their residence and separated over three yrs prior to purchase.)

I'd disagree... he lived in a house he has ownership of (married to the owner) within the last 3 years.

No FTHBC

Chris

[BP.]

Yep, with you on this, spanel. You are correct-- he did have ownership.

[RZellers]

Wow BP, hope ya didn't hurt yourself on that 180 there!

Anyway, I guess I have to reluctantly agree. He had an interest.

Thanks for the feedback.