gifted home

maryreid
Contributions:8

my parents gave their old home to my sister and myself. i paid her for her half of the house. since i didn't actually purchase the house, would i qualify for the $8K credit?

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March 12 2009 - Greensboro

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Answers (7)

Nathan Wolf, "natewolf"
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The IRS 5405 FORM you can read the documentation.

It comes down to whether you have owned this property as a principal (main) residence. Or if you have owned any other home as a principal residence.

If this home your parents gave you is used as a rental property or as a second home, and NOT your principal residence, then you would qualify.

Ultimately, a tax accountant can help you determine your ability to claim the credit. If you need a link to more information about the credit, you can contact me and I will send you a link to more information.

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March 18 2009

sunnyview
Contributions:25115

I think the gifted house would eliminate you from the program. Here is what the IRS says "For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase." You can read more specifics here. If you lived in the home yourself within the last 3 years following the purchase, I would not think you would qualify for the credit. IF you have had it as a rental property instead for the last 3 years, I don't know what the answer is. Before you count on the credit I would consult a tax attorney or give the IRS a call to be sure. The way I read the IRS conditions, you would not qualify. That answer may be different if this property was a full time rental though. Was it a rental?

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March 13 2009

maryreid
Contributions:8

i'm sorry, i should have been more clear....i am buying a new house and want to know if i would qualify for the credit considering i now own the home that my parents gave to me? would the gifted house eliminate me from being a "first time buyer"? thanks

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March 13 2009

maryreid
Contributions:8

so the answer is i would qualify for the credit?

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March 13 2009

NTETS, "Mr Caveat"
Contributions:6436

not on that home you would not, even if you had payed 1$ and "bought" it, still no.

"buying off your sister" does not count either

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March 13 2009

David Shedd, "dshedd"
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Adding to that, there are a couple of details anyone considering the credit should know. One, the test for whether you're a first time homebuyer is whether you've had a mortgage deduction on your taxes in any of the previous 3 years. Two, the credit is the smaller of $8000 or 10% of the purchase price. So, if you buy a $30,000 foreclosure, you're limited to a $3000 credit...which is still pretty good!