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First-Time Home Buyer Tax Credit Qualifications - The Bills.com Blog
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First-Time Home Buyer Tax Credit Qualifications
Monday, Jun 22, 2009
Question: My sister and I are purchasing a house together. I qualify as a first time home buyer. My sister's name is on the mortgage but my name is on the deed. I will be contributing $800 a month to make the payment. Do I still qualify?
Answer: I assume you are asking this question in the context of the First-Time Home Buyer Tax Credit , which is a program available in 2008 and 2009 for first-time home buyers. A first-time home buyer is defined as someone who has not owned a principal residence in the last three years. For married people, if either spouse owned a home in the last three years, both are considered to be recent homeowners, and hence do not qualify. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer.The First-Time Home Buyer Tax Credit :
• Applies only to homes used as a taxpayer's principal residence.
• Reduces a taxpayer's
tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405, which you file with your original or amended tax return.
You may need to structure the mortgage and deed to reflect the joint ownership to qualify for the credit.
On the other hand, you may be on the deed alone and your sister on the mortgage alone for reasons you don't mention in your question that outweigh the amount you
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405, which you file with your original or amended tax return.
You may need to structure the mortgage and deed to reflect the joint ownership to qualify for the credit.
On the other hand, you may be on the deed alone and your sister on the mortgage alone for reasons you don't mention in your question that outweigh the amount you
would get in the tax credit. If you do have additional complications, consult an attorney in your state who specializes in property law so that you and your sister can understand the implications of how you have structured the ownership language on the deed and mortgage.
To find an attorney in your area who specializes in property law, you can contact your county or state bar association's attorney referral service.
If get a free, online mortgage quotes, visit the Bills.com Free Mortgage Quote page.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/blog/
To find an attorney in your area who specializes in property law, you can contact your county or state bar association's attorney referral service.
If get a free, online mortgage quotes, visit the Bills.com Free Mortgage Quote page.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Gary on Wednesday 1st July 2009 19:25
RE: Joint Ownership and the 2009 1st Time Home Buyer's Tax Credit. I would part-owner/occupy the property as my primary residence and would be the only co-owner to qualify for the 1st Time Home Buyer's Tax Credit. Would I receive the full compliment of the credit? Would the income limit still be 150k for the combined income of 3 idividual partners filing separate tax returns?
2. Posted by Mark Cappel on Thursday 2nd July 2009 09:50
Review IRS Form 5405 closely. Take care with the structure of your partnership and the allocation of the credit to make sure you qualify. Regarding the modified adjust gross income limits, as I read 5405 those are for you (or you and your spouse if you file jointly) and not all of the partners. However, I am not a tax lawyer, so before you take any action spend an hour with one to go over your partnership agreement and your taxes to make sure you qualify.
3. Posted by vmc on Sunday 12th July 2009 13:25
I am under 59 1/2 and want do a hardship early withdraw of 10,500 for a downpayment for a home what is the total amount i will have to pay counting pentaly ,state, and federal taxes I will in the state of Ma, Thanks vmc
4. Posted by Bill on Monday 13th July 2009 08:16
Impossible for me to say. Take your last three tax returns and recent pay stubs to a tax planner and have him or her review your tax and income situation. It would be easy for someone to guess at a number, but you really don't want a surprise next April 15. Take the time and spend the money to get an accurate estimate.