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Can the $8,000 tax credit be applied to the purchase of a three unit home?

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I am finding that the $8K tax credit program is exceedingly difficult to get good information about. I have my eye on a three unit building but would like to know if I can apply the credit to such a property (and yes, it will be my principal residence). I have found some information stating that only single-family residences qualify and other information saying any principal residence can qualify. Any clarification would be greatly appreciated!

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April 05 - Waterfront

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Luis Fernandez, "lucho975"
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Luis Fernandez, "lucho975"

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Yes, on a primary residence if you have not owned anything for the last 3 yrs.

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April 12

sunnyview
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You can call the IRS directly. They will field the call and refer you to a specific department if needed. I agree that taxes require a professional so check into it to be sure.

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April 06

Michael Emery, "MikeEmery"
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A review of the IRS documents give a muddy interpretation of the law. While you are NOT able to use the home buyers credit to purchase rental property, it seems the rules are a little fuzzy when it comes to buying rental property that you are also using as your primary residence. The only example the IRS gives is when you buy a home and then rent out bedrooms. Even then, the IRS website is fuzzy. As with any complicated tax question, contact your tax professional and even the IRS.

But I agree with Bob's contribution. Never rely on us 'experts' for the final answer.

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April 06

Frank Sirianni
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Frank Sirianni

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Thank all of you for the thoughtful input.

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April 06

Bob Phillips, "BobPhillipsRE"
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Bob Phillips, "BobPhillipsRE"

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While neither Sunnyview's IRS form, or Michael's Q and A page, specifically address your situation, I would try to dig deeper, before relying on their answers as the final authority.

I suspect that the IRS might spell things out more elaborately on one of their related, but more extensive publications. I would ALSO suspect that there might be some "portioning" of the property - what portion of the entire property is your personal dwelling space, and so forth.

Seek the more authoritative answers of a qualified tax person.

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sunnyview
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Yes I think it would qualify as long as it was owner occupied for the prescribed time. Multiple units can be a great way to start home ownership from my point of view as it cuts monthly costs and helps you build equity faster than a single family. Here is the IRS form 5405 that explains the requirements to qualify for the credit. If you are still unsure about it, you can call them directly and they will tell you.

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Michael Emery, "MikeEmery"
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Yes as long as its your principal residence and you plan to stay in that home for five years or expect to pay the money back to the IRS. Of course as others have pointed out, there are other restrictions, so consult a tax professional for further info. Here is a link from the Natl Assn of Home builders which is more relevant to those building a home, but it has most of the necessary info. Also depending on where you live, there may be additional moneys available from city programs for homes in distressed neighborhoods.

http://www.federalhousingtaxcredit.com/2009/faq.php

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nvchaz
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My understanding is yes, as long as you maintain residence on the property for three years.

My opinion is not definitive -- seek professional tax advice.

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April 05

wetdawgs
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The $8000 credit is for your principal residence, and that can be a SFR, condo, mobile home or shack in the woods. The dwelling must be used as your principal residence, therefore, what you are proposing is not likely to qualify because only 1/3 would be your principal residence. Please consult with a tax attorney or CPA for clarification.

There are other aspects you should be aware of:
1. It is for first time homebuyers (i.e. not owned within 3 years).
2. There are income limits.
3. the $8k cannot be more than 10% of the value of the principal residence.

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April 05

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April 12

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