FTHBC Rental converted to personal

[BHoffman]

Client is a 20% partner in a partnership that owns a residential rental.

The loan and the title are in his name.

The other guys just want to walk away.

Client has never owned a primary residence, always lived in an apartment. Has not itemized deductions.

Client moved into residential rental in May 2009. No paperwork was filed since the property and the loan were always in his name.

Does he qualify for the FTHBC?

I have searched this site and others for answers, but came up empty.

Am now officially stumped.

[WhiteOleander]

I'm not sure. When was the property purchased? He moved into it in May of '09. But not sure when the property was actually purchased.

Was the partnership issued an EIN which would require a return to be filed? If so, I think that might knock him out because it was not originally purchased as his residence. And the move in by him would be considered aquired from a relation.

Very unique question.

[BHoffman]

The property was purchased in 2006. He has never lived in the house. A partnership tax return is filed.

As I read the destructions, a related party business entity is one where the partner/shareholder holds >50% interest. This client holds 20%.

There won't be a current HUD-1 statement since it was purchased years ago, and no title transfer since the house is in his name. The mortgage loan is in his name. He has never itemized deductions on his 1040, and has never claimed any mortgage interest or property taxes on a Sch A.

[ChEAr$]

The property was purchased in 2006. He has never lived in the house. A partnership tax return is filed.

As I read the destructions, a related party business entity is one where the partner/shareholder holds >50% interest. This client holds 20%.

There won't be a current HUD-1 statement since it was purchased years ago, and no title transfer since the house is in his name. The mortgage loan is in his name. He has never itemized deductions on his 1040, and has never claimed any mortgage interest or property taxes on a Sch A.

IMCO, since HE did not purchase the property after the applicable date last year, he does
not qualify for any credits.

Don't let the partnership less than 50% cloud you thinking.

[WhiteOleander]

I agree with ChEAr$. The purchase date of this property is 2006. No way that would fly with the IRS. That's my opinion.

[BHoffman]

OK - I think I found the answer - the FTHBC seems to depend on the date of purchase, not on the date of occupancy. Needed to justify this to the client.

Thanks for your help

[gkaiseril]

Remember you will need to attach the HUD-1. This is for purchased homes, the operative word being 'purchased'.

[BHoffman]

Yes, and there is no current HUD-1. He could be considered as purchasing the property from the partnership, and his interest in the partnership is less than 50% so the related party rule might not apply. This is what had me confused.

But, I believe the home itself would have needed to have been purchased within the credit time period and it was not.