Recapture 1st Time Homebuyer Credit

[GTS1101]

Client bought home with his brother 50/50 in 01/09. Each got 4,000 of the 8,000 new home buyer credit. One of the brothers moved out 04/11 and bought another house. He gave the 1st house they owned together to his brother. Both are still on title and on the loan to the original home they bought together. I am assuming he has to pay back the 4,000 but I wanted to see if anyone knew if it was possible to transfer the responsibility of the 8,000 to the other brother like you would in a divorce settlement? I assume not but I am trying to find a way to save my client the 4,000 if possible within the law.

GTS1101

[BP.]

Not sure but- Have a look at Form 5405, p. 2,Part III to see if your situation would fit there. Perhaps the deed could be changed, if not the mortgage?

[BP.]

possible to transfer the responsibility of the 8,000 to the other brother

Sorry, I think I've incorrectly interpreted your post. When I read "responsibilty of the $8,000" I thought of the responsibility to repay the FTHB loan. Your homeowners did not get the loan but the true credit, so there's no repayment required of the remaining inhabitant. I am not sure if there's a mechanism to transfer the credit from one to the other, but probably not, especially since they each got $4,000 on their individual returns.