First time home buyer credit

[TAX]

Client, 1040, did not qualify for $6,500 first time home buyer credit in 2010 because income was $245000.

But in 2009, joint income was only $215,000

(1) I think I can amend 2009 return and get this credit of $6,500.

(2) Is there any deadline for amending 2009 return or it is usual three years?

Thanks!

[Koss]

Yes

I see no reason why your client can't claim the credit on the 2009 return. It may reduced, 'cause the income is still in the higher range. But it appears that they are eligible for the credit on the 2009 return.

I'm assuming that the house was purchased in 2010.

I also know of no reason why the time frame for amending the 2009 return would be any different in this case.

At first glance it seems counterintuitive. I was thinking, Jeez, isn't it based on the taxpayer's income for the year in which they bought the house?

But apparently it doesn't work that way. I haven't tried to find the applicable code section. But it must be based on the taxpayer's income for the tax year in which they are claiming the credit. If it was based on income for the year of the purchase, it would not have been possible for taxpayers who bought the house in 2010 to claim the credit on the 2009 return. The rules explicitly allowed taxpayers to claim the credit on a 2009 return--original or amended--before the end of 2010. Many taxpayers did this, and they would have had no way of knowing what their income for 2010 would be at the time they filed the 2009 return.

BMK