First Homebuyers Credit Repayment

[DaveinTexas]

Hello All,

I hope you are surviving this season. I have an interesting situation.

My clients, married, purchased a home in 2008 and took the $7,500 credit/loan as first home buyers. In 2009, they divorced and the home was converted to a rental property; an event that triggers an immediate payback of this credit.

The divorce decree states the husband is "responsible for the mortgage payment" but no transfer of title is mentioned. So as it stands, they still co-own the house and they are both on the title. Meanwhile, the husband is living in another state and the wife is operating and maintaining the rent activities.

I can't find the procedure/method to take for the repayment.
1. Do they owe $3750 each in 2009? Or....
2. Since he is "responsible for the mortgage payment", does he have to repay the credit in full? Or....
3. Since she is operating the rental property, is she responsible for repaying the credit in full?

TIA and to all a good filing season.

[Gretel]

Hello All,

I hope you are surviving this season. I have an interesting situation.

My clients, married, purchased a home in 2008 and took the $7,500 credit/loan as first home buyers. In 2009, they divorced and the home was converted to a rental property; an event that triggers an immediate payback of this credit.

The divorce decree states the husband is "responsible for the mortgage payment" but no transfer of title is mentioned. So as it stands, they still co-own the house and they are both on the title. Meanwhile, the husband is living in another state and the wife is operating and maintaining the rent activities.

I can't find the procedure/method to take for the repayment.
1. Do they owe $3750 each in 2009? Or....
2. Since he is "responsible for the mortgage payment", does he have to repay the credit in full? Or....
3. Since she is operating the rental property, is she responsible for repaying the credit in full?

TIA and to all a good filing season.

Some thoughts. First I would make sure how the property is titled. When you say, wife is operating rental activity, do you mean she keeps the income, or is she just a manager (paid or unpaid)? If wife is still on title and keeps the income then it would be her rental. If she doesn't pay mortgage, no one gets this deduction.

For FTHB repayment I think both would be responsible for repayment 50/50.