Yet Another FTHBC

[WhiteOleander]

Client filed an amended to claim the FTHBC. Another firm filed it. IRS has denied the credit because they say the house was aquired through gift or inheritnace. It is a Habitat for Humanity house. They do pay for the house. They do not pay interest and they must do sweat equity to purchase the house. The sweat equity has to be done on any house. Not necessisarily on the actual house they purchase. If they default, the house is foreclosed on.

We have done Habitat for Humanity FTHBC in our office and the client received their credit.

Anyone have any experience with this?

[erchess]

No experience with FTHB issue

but I have dealt successfully with IRS personnel who did not understand the facts of the case. All I have had to do is provide evidence. I would think that canceled checks to whomever they are paid would help and you might also include the Purchase Contract (still a HUD 1 for Habitat buyers?) with highlighting of the parts calling for a down payment and periodic payments even though this was most likely provided with the return perhaps without the highlighting. Keep a copy of everything of course and call in a reasonable amount of time after sending the letter. If the person is still obtuse talk to their supervisor and then appeals and/or OTA.