First time (long time) Homeowner Credit

[origun]

Client owned a home (2003-2009) with previous wife; divorced in Dec. 2009. Actually mortgage was only in name of ex-wife but a deed was signed and filed adding him as co-owner in '03 and another signed taking him off as co-owner in '09. Both transactions had zero dollars as purchase and sale price. He thinks (and was told by realtor) that he wasn't "owner" as he wasn't on mortgage but I disagree and feel that only the $6500 credit is available, not the $8000. Do you agree?

Follow-up question: He bought a new home in January '10 and has all the appropriate paperwork for that purchase. Then he re-married later in '10 and wants to file a joint return. New wife has not been a homeowner and her name isn't on the deed of new home.

So...is he a long-time home buyer eligible for $6500 credit? I believe that his marital status at time of purchase allows him to take credit even though new wife isn't a long-time home owner. Am I correct?

[Dusty2004]

I say he was an owner

Client owned a home (2003-2009) with previous wife; divorced in Dec. 2009. Actually mortgage was only in name of ex-wife but a deed was signed and filed adding him as co-owner in '03 and another signed taking him off as co-owner in '09. Both transactions had zero dollars as purchase and sale price. He thinks (and was told by realtor) that he wasn't "owner" as he wasn't on mortgage but I disagree and feel that only the $6500 credit is available, not the $8000. Do you agree?

Follow-up question: He bought a new home in January '10 and has all the appropriate paperwork for that purchase. Then he re-married later in '10 and wants to file a joint return. New wife has not been a homeowner and her name isn't on the deed of new home.

So...is he a long-time home buyer eligible for $6500 credit? I believe that his marital status at time of purchase allows him to take credit even though new wife isn't a long-time home owner. Am I correct?

He had ownership of a house that he lived in. He may not have paid the mortgage but he did own the house.

Since he owned the house and the spouse did not own the house there is no credit for either of them.

Dusty

[BP.]

is he a long-time home buyer eligible for $6500 credit?
I believe that his marital status at time of purchase allows him to take credit even though new wife isn't a long-time home owner. Am I correct?

No-
From FTHB page at irs:
"Both spouses must have owned and used the same previous principal residence for five consecutive years out of the 8-year period ending on the date of purchase of the new principal residence to qualify for the credit."

[origun]

Marital status when purchased

An IRS Q & A says:
S1. If a single person (Taxpayer A) qualifies as a first-time homebuyer at the time he/she purchases a home with someone (Taxpayer B) that is not a first-time homebuyer and then later that year they marry each other, is the credit still allowed?

A. Eligibility for the first-time homebuyer credit is determined on the date of purchase. If Taxpayer A, a first-time homebuyer, buys a house and then later that year marries Taxpayer B, not a first-time homebuyer, the credit is allowable to Taxpayer A. Taxpayer A may take the maximum credit.

Would this be applicable to long-time homeowners such as my client--"eligibility ... is determined on the date of purchase"? He was single when home was purchased so might he be eligible?????

[BP.]

Sorry . . . didn't really notice he bought and then married subsequent. You are right, it is marital status at purchase that determines.

[Dusty2004]

Details

An IRS Q & A says:
S1. If a single person (Taxpayer A) qualifies as a first-time homebuyer at the time he/she purchases a home with someone (Taxpayer B) that is not a first-time homebuyer and then later that year they marry each other, is the credit still allowed?

A. Eligibility for the first-time homebuyer credit is determined on the date of purchase. If Taxpayer A, a first-time homebuyer, buys a house and then later that year marries Taxpayer B, not a first-time homebuyer, the credit is allowable to Taxpayer A. Taxpayer A may take the maximum credit.

Would this be applicable to long-time homeowners such as my client--"eligibility ... is determined on the date of purchase"? He was single when home was purchased so might he be eligible?????

Amazing how the details can change an answer. Yes HE would be eligible. What I would do to avoid a mess is to file an amended return for him for last year and claim the credit then. Make sure that he purchased before marriage and only he purchased it.

Dusty