Profile picture for jesus888

Do I qualify for 1st time Home Buyers tax credit?

I currently am on the deed for my primary residence, HOWEVER I have never had a mortgage related to this.  My parents purchased the condo and put my name (along with my father's name) on the deed.  Does this disqualify me from the tax credit?
From the FAQ on the tax credit:
"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."
Thanks in advance!
  • July 22 2009 - Buckhead
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Answers (7)

The First Time Homebuyers Credit is a tax program. So if you have taken advantage of home ownership taxwise, you would not qualify for the program.

If your name is on the deed, it would appear that your father owns the property and you are purchasing the home in a contract for deed type of transaction (as opposed to you renting where you have no equity in the property). This too would most likely disqualify you from the program.

I say most likely because I don't think we have all the facts necessary to give you a judgment. For this specific question, I would call the IRS directly for clarification. (see irs.gov).

The paragraph you have highlighted is irrelevant to your argument because it specifically addresses what happens when a child buys a home with the assistance of a parent (parent doesn't get the credit, child does). Since you already own a home, your argument is whether you have been renting the property (with no tax advantages) or whether the IRS views this as a contract for deed situation.

Good luck.
  • July 22 2009
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I'm saying that it's up to his tax professional to make the decision, not his Realtor.
He would have to buy a home to qualify for the tax credit, assuming the condo was bought prior to 2008 and then the fact he is on title would become an issue with his lender. Lenders got burned too many times with someone who "owned" another property, buying a second primary residence as owner occupied. They will err on the side of caution this time around.
  • July 22 2009
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Profile picture for sunnyview
So I am unclear. Are you saying Mr. Cook that you feel that this poster would qualify for the buyers credit as someone who occupied the same property that has his name is on the title I am not sure that the IRS would agree. See their FAQ definition that includes nothing about a the name on the mortgage here

 Who is considered to be a first-time homebuyer?A. Taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase.Ownership and a taking a mortgage interest deductions are different. 

Skirting IRS rules can be very dangerous. Simply taking your name off the title will not automatically make you a first buyer eligible for the credit. Please ask the IRS about that directly. This is a tax question and you need a totally correct answer or you risk an audit and having to pay penalties and the amount of the credit back later. Get the info you need from the source.
  • July 22 2009
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Here is a great website for the tax credit:http://www.federalhousingtaxcredit.com/2009/faq.php

I do not think you will qualify because you are on the deed for your primary residence. 
  • July 22 2009
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If your name is not on the mortgage and/or you haven't taken the interest deduction. Qualifying for the credit is something your tax professional can advise you on.
If you are going to buy a home, you need to get your name off title to the condo ASAP. Lenders now routinely run MERS, which tells them if you have ownership interest in any other properties. This could "blow up" your purchase, so I would take care of it before you even start the process.
Don't forget, the tax credit expires on Novemeber 30, and even though that seems a long time off, the buying process takes much longer than it used to (at least 45-60 days just to get into escrow). So, it's time to move forward.

Thanks
Greg

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  • July 22 2009
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I do live in the condo, and I will take you up on your advice and call the IRS :)   
  • July 22 2009
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Profile picture for sunnyview
Do you live in the condo? If this condo is your primary residence, I do not think that you would qualify from what I have read. The fact that you have no mortgage in your name would make no difference if you lived in the condo. I believe that the quote that you posted from the FAQ assumes that one person on the title could still be considered a first time buyer if they do not live in the property. It is a fairly specific tax question so, I would recommend asking a tax professional or calling the IRS directly. They can give you a 100% hang your hat on it answer.
  • July 22 2009
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