Long Time Resident Credit

[dor1500]

I have a client that tore down first home constructed a new home on same land (new mortgage) can she get the credit. Lived over 15 years in home??

[Possi]

Good question!

I would think so, with a new home and a new mortgage, but don't take my answer as gospel...

[Peachie]

Imho,

She gets it.

Peachie

[BOB W]

She gets it.

Peachie

I think you are going to have problems with IRS. Aren't they looking for a HUD statement at a different address then your previous address??????

[Possi]

disallowed?

No! The address shouldn't be the end all.. After all, it really does qualify.

[BP.]

Had one like that. We attached the construction contract which included demolition of old home; U&O cert for the new home; homeowner's insurance declaration page showing coverage for present structure & "home under construction"; construction loan docs from bank; increased real estate tax bills showing new assessment. Hope these will counter any issue with the address being the same.

[dor1500]

Client has all the documentation

[BOB W]

This credit was designed to create home purchase activity with free choice to buy a new home. Your client's issue was not free choice, they had no other choice. How important "Free Choice" is, I don't know but I see a problem here.

File the tax return without FTHB then file an amended return with it. Let's see what happens...?

[BP.]

I see a problem here.

IRS FTHB scenarios include some Q&A's for new construction, and it is eligble. Not sure why you see a problem -- is it because it is built on land already owned by taxpayer?

Also not understanding your "free choice" view point. But in any case, certainly this taxpayer had a free choice in demolishing, borrowing funds for, and constructing a new home.

Is this essentially any different from any other qualifying new construction? Or deciding to construct on unimproved land already owned, in order to take the credit?

Both hiring a builder and taking out a mortgage create the "home purchase" activity you describe, just the same as if you didn't have to first demolish an existing dwelling.

[RitaB]

Is the move in date ok?

I have a client that tore down first home constructed a new home on same land (new mortgage) can she get the credit. Lived over 15 years in home??

Did the folks move into new home after Nov 6, 2009? If so, I think they qualify.

IRS wants to see the Certificate of Occupancy, See instructions to 5405. My county does not issue this, and if yours does not, this may be tough, but stick with it. BP has good list up there, and your client has documentation, so I think you're in business if the date ok.

[BOB W]

IRS FTHB scenarios include some Q&A's for new construction, and it is eligble. Not sure why you see a problem -- is it because it is built on land already owned by taxpayer?

Also not understanding your "free choice" view point. But in any case, certainly this taxpayer had a free choice in demolishing, borrowing funds for, and constructing a new home.

Is this essentially any different from any other qualifying new construction? Or deciding to construct on unimproved land already owned, in order to take the credit?

Both hiring a builder and taking out a mortgage create the "home purchase" activity you describe, just the same as if you didn't have to first demolish an existing dwelling.

So anybody that has their house burns down get the credit when they rebuild it...... That is what the question is all about, isn't it.

[BP.]

So anybody that has their house burns down get the credit when they rebuild it...... That is what the question is all about, isn't it.

I'm not sure if the question is about getting a credit for rebuilding a house destroyed by fire- I didn't notice that part in the original post. (The case I referenced in an earlier post on this thread was not due to fire.)

[BOB W]

I'm not sure if the question is about getting a credit for rebuilding a house destroyed by fire- I didn't notice that part in the original post. (The case I referenced in an earlier post on this thread was not due to fire.)

That is what my "Free Choice" is all about. In the case of fire, there is no choice.

[Peachie]

This matches your situation exactly (I think).

I have a client that tore down first home constructed a new home on same land (new mortgage) can she get the credit. Lived over 15 years in home??

"Instead of buying a new home, I hired a contractor to construct a home on a lot I already own". Do I still Qualify for the cedit.

ANSWER: Yes. For purposes of the HBTC, a principal residence that is constructed by the home owner is treated by the tax code as having been "puchased" on the date the owner first occupies the house which must be after Noember 6, 2009 and or or beore 4/30 or 6/30 provided a binding sales contract was in force by 4/30.

One more thing: Had the house been purchased from a home builder--the settlement date would have been the determining factor.

[dor1500]

Thanks all been very helpful.