[this8384]

My husband and I purchased a home last year(2010). The home had gone into foreclosure but the owners/sellers were still living in the home. We have a written acceptance from the sellers dated in March 2010. However, we didn't get the final approval from the seller's bank until September and we closed on September 29, 2010.

I've heard conflicting answers and nobody seems to be able to give us a straight yes or no. The argument is that although we have an accepted offer prior to the cutoff date(4/30/10) and closed before the final cutoff date(9/30/10), the final okay had to be done through the seller's bank. Since the bank didn't "approve" the sale prior to April but the sale went through anyway, are we still eligible for the homebuyer's credit?

[AtlantaTaxExpert]

Wow! That situation is NOT one that can really be answered based on information generally available.

You probably should call the IRS, make an appointment and go speak with an IRS representative face-to-face with all of the pertinent paperwork to get an answer IN WRITING. Once you have the written answer, and assuming you DO qualify for the credit, you can then file the return with the written answer attached.

[this8384]

Wow! That situation is NOT one that can really be answered based on information generally available.

You probably should call the IRS, make an appointment and go speak with an IRS representative face-to-face with all of the pertinent paperwork to get an answer IN WRITING. Once you have the written answer, and assuming you DO qualify for the credit, you can then file the return with the written answer attached.

Good to know I'm not the only one confused! :)

Actually, the link here:
Seven Important Facts about Claiming the First-Time Homebuyer Credit
Just says we have to be in contract by 4/30(which we were) and close by 9/30(which we did).

I'm calling the IRS right now to see what they can tell me.

[this8384]

Spoke to the IRS; she stated that we do qualify for the credit because we have a signed contract that was dated prior to April 30, 2010 and initially set to close prior to July 1, 2010. Woohoo! :)

Thanks for the help!

[AtlantaTaxExpert]

That is ONE way to read it. However, the person who examines your return may NOT interpret the rules that way, in that he/she may not interpret the house NOT to be under contract until you have the BANK's approval.

That is why you should, In my opinion, EMAIL the IRS and get an answer IN WRITING that says you qualify.

Of course, you CAN file the tax return with the credit and hope for the best. Your choice!

[this8384]

That is ONE way to read it. However, the person who examines your return may NOT interpret the rules that way, in that he/she may not interpret the house NOT to be under contract until you have the BANK's approval.

That is why you should, IMHO, EMAIL the IRS and get an answer IN WRITING that says you qualify.

Of course, you CAN file the tax return with the credit and hope for the best. Your choice!

Hmmm... interesting point. I'd e-mail them if they provided an e-mail address.