My girlfriend and I are buying a house together. I am not eligible for the credit because I already own a home. I will be putting the down payment down, but we will be splitting the mortgage. We will both be on the deed, but under tenancy in common. This allows us to provide different ownership percentages, and hers will most likely be under 50%.

Can she claim the entire credit since I am not eligible?

Also, how can we divvy up the mortgage and property tax deductions?

This was just answered in my local newspaper - you CANNOT get the first time homebuyer's credit if a person on the mortgage or deed is, in fact, not a first time home buyer.

I'm curious to see what anyone else has to say because I considered this - I've owned several parcels of property and was thinking of buying property with someone else who is a first-time buyer. Both bank and mortgage company told me the property would have to be held exclusively in the other person's name.

Did this local newspaper quote anything official (e.g. IRS publication)?

I didn't save the article and so I don't know.

But I DID find this which seems to say just the opposite: Federal Housing Tax Credit for First-Time Home Buyers: Frequently Asked Questions (http://www.federalhousingtaxcredit.com/2009/faq.php#2)

I have found some articles and IRS publications which say that my girlfriend can get the whole credit. I just haven't found anything that's crystal clear, nor have I found anything addressing the ownership interest.

Since you are BOTH on the deed, she CANNOT claim the entire $8,000 credit.

She CAN claim half of the credit ($4,000) if her ownship is at 50%. If not, then she needs claim the credit based on her percentage of ownership.

I have read publications that state differently, but most of what I've read applies to the old $7500 deduction. Can you state your sources please? Thanks

I think I already did - above.

"For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer."

I meant the AtlantaTaxExpert. I was just wondering where he's getting his info from?

Possibly the same site I got mine from because "Atlanta" says the same thing I quoted.

Notice 2009-12, which is linked below:

http://www.irs.gov/pub/irs-drop/n-09-12.pdf

That is the same publication I've been reading. In there, it says I can use any reasonable method to allocate the credit. It defines a reasonable method as "any method that does not allocate any portion of the credit to a taxpayer not eligible to claim that portion". In Example 4, it even says the whole credit can go to one buyer since the other buyer is not eligible for the credit.

So I still have to ask where you're getting that she can only claim $4k?

DupyDog:

If you think an IRS auditor would consider it "reasonable" for your girl friend to claim the entire credit when she only owns, at most, half of the house, then it is apparent who have never had to deal with an IRS auditor.

Have her claim the full $8,000 credit. Just do not be surprised when the IRS challenges the credit, disallows it in total due to alleged fraud, then slap her and probably you with a large fine.

I'm not sure I like your tone. There's no need to imply we're trying to fraud the IRS. I was simply asking why you think the answer to my question is $4k, and I see I still haven't gotten a straight answer from you. I'm guessing you think it's $4k because that's what you think the fairest method is. Or perhaps you've had experience with similar laws where the IRS said one thing and then changed it later to a more fair ruling. If this is the case, please speak up and give me that evidence.

As for what's reasonable, why would the IRS provide example 4 in notice 2009-12? According to you, person A should only be allowed 1/2 the credit, but the IRS is giving him the entire credit. So I'm not sure why you say the IRS will question what we're doing when they've already provided the basis for doing it that way.

I'm not trying to work around the system. I just want a straight answer on how to do this. I'm no tax expert and I wouldn't be the least bit surprised if I'm interpreting the IRS incorrectly. If something in your experience is telling you that $4k is the right answer, then please explain it to me. Don't jump off the handle and tell me I'm trying to commit fraud.

This is a question and answer site - for the very specific information you need to HIRE a professional. "We" provide very broad base information and a direction and then it's up to you.

Our resident expert is not obligated to give you his reasoning and references - you have been furnished with the law and now it's up to you.

Anything specific - HIRE a professional.

Don't mean to be disrespectful but this is #15 in the question and answers on ONE subject and there are all sorts of people waiting for answers out there - and we are all volunteers.

I understand this is a free service where I won't get the most specific information available. That doesn't mean that I should be talked down to or accused of cheating the IRS. And I realize you're providing a free service, but that doesn't mean I don't have the right to question what you have to say.

I appreciate any free advice given and any time taken to give that advice. I would also not be insulted if I was told my case is too specific and that I needed to hire a professional. So I take no offense to your post, Judy.

You questions are too specific and you need to hire a professional - and no offense taken.

And yet another shining example of someone not liking the answer they are given and attacking the responder.

OP - have your girlfriend file for the full 8k like AtlantaTaxExpert (and that's NOT just a screen name... its accurate) said and let the IRS deal with your fraud. And that IS what it is.

And yet another shining example of someone not liking the answer they are given and attacking the responder.

OP - go ahead and have your girlfriend file for the full 8k like AtlantaTaxExpert (and thats NOT just a screen name... its accurate) said and let the IRS deal with your fraud. And that IS what it is.



Well, but he DID explain his "rights" to us - :)

Well, but he DID explain his "rights" to us - :)

They always do... they always do. Funny thing is that most people do not understand what their rights actually are and more importantly, how they apply to the real world.

Wow, I'm really baffled by everyone's attitude on this post. Why am I the bad guy for asking follow up questions? Am I not allowed to ask where the expert is getting his information from? Please explain to me how I am "attacking the responder" because I feel like I'm the one being attacked.

Dupydog:

We MAY have come down on you a little hard, but the IRS has posted numerous Q&As on this issue, and I have called and asked about this particular issue a number of times.

The advice given to you IS accurate, even if I cannot find the specific posting on the IRS website; it just seems that you do not want to believe us, which can be frustrating at times.

Atlanta,

Thank you for your time and advice. I decided to look elsewhere for advice, and other forums were able to help me. They supported their answers with evidence (IRS quotes, rulings, etc.), not with vague statements. The IRS has posted numerous Q&A's on the homebuyer's tax credit, but not on my specific situation. I have made phone calls too, and the representative on the IRS hotline has already said $8k. I'm sure calls made by a tax expert hold more weight, so I'm more than happy to hear what your calls said about my situation. What reasoning did they give for the answer being $4k? Some reasoning and thoughtful interpretation would be welcome and much appreciated. Or if you come across that specific posting you alluded to, then I would love to read it. Until then, I cannot just take your word on it until you provide some type of evidence or analysis.