Allocation of FTHB Credit?

[Black Bart]

Unmarried couple purchased a house together -- each has already filed 1040. Joint title and each is paying half, but (although both are eligible for $8K first-time credit) I want to give the whole $8K to her (have joint bank account and it's okay with him) to keep from filing TWO 1040Xs.

The allocation instructions state "A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit." IRS' gives example of an unmarried couple: one is long-time resident eligible and gets $6,500 -- other is eligible for FTHB and gets the $1,500 bal. .

Questions: When both are eligible, would IRS consider giving one TP all the money and the other nothing a reasonable method?

Taken literally it seems that their only requirement is that an ineligible party can't get anything. On the other hand I worry that somebody in the processing chain might think it "reasonable" that an eligible party should get something and send it back saying just that. I may be making too much of the possibility, but FTHBs are slow enough when everything's okay, much less with any other "oddball" situations (I can picture it taking a year...). If it was rejected for that, I don't even know how I'd fix it -- how do you amend an amended return? Or do they simply throw out the 1040X and you start all over again.

Anyway, I'm trying to avoid getting in a fix before I get into it. Has anybody sent in an unmarried couple FTHB (both on title) and given all the money to one TP?

[veritas]

I have

Got the money in about 5 weeks.

I did make the one taxpayer sign a statement for my file that they were in accord with the other party taking the entire credit. In this case a father and daughter both qualified.

[OtisMozzetti]

credit was allocated to one of joint buyers

I had an unmarried couple assign the entire credit to the woman who was a first-time homebuyer since the man who bought the property jointly had been a previous homeowner within the prescribed period. They encountered no problem.

Read what the IRS said and go by that. I guess that you would certainly have to make sure that your claimant's SHARE of the property cost the full $80,000.

[Black Bart]

Thanx, boys.

Got the money in about 5 weeks. I did make the one taxpayer sign a statement for my file that they were in accord with the other party taking the entire credit. In this case a father and daughter both qualified.

Five weeks!? You oughta be ashamed of yourself! What'd you do -- ride it straight to the IRS office on your Harley and demand quick service?

...I guess that you would certainly have to make sure that your claimant's SHARE of the property cost the full $80,000.

Well, shoot! I hadn't even thought about that. Now I do have problems 'cause her half is less than $80K (small house).

Hmmm; that's fairly basic I suppose -- she won't pay that much and so she can't get that much. And here I was worrying about lawyerly fine points such as: since he wasn't filing at all there would be no legal agreement on file with IRS for her to take his half. And since she was filing alone, she had no legal standing to agree for him.

Oh well; back to the drawing board -- TWO 1040Xs after all (but also two fees ). Probably just as well; they have a joint account and are now happy as pigs in sunshine (say they don't care how it's split) but odds are that attitude won't outlast the mortgage.

And so it goes.