Zillow Advice: Home Buying - Can the $8,000 tax credit be applied to the purchase of a three unit home?

Yes, on a primary residence ...

Sun, 12 Apr 2009 20:05:00 GMT

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

You can call the IRS directly. ...

Tue, 07 Apr 2009 02:43:00 GMT

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.

A review of the IRS documents ...

Tue, 07 Apr 2009 02:39:00 GMT

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.

Thank all of you for the ...

Tue, 07 Apr 2009 00:11:00 GMT

Thank all of you for the thoughtful input.

While neither Sunnyview's ...

Mon, 06 Apr 2009 19:10:00 GMT

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.

Yes I think it would qualify ...

Mon, 06 Apr 2009 18:45:00 GMT

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.

Yes as long as its your principal ...

Mon, 06 Apr 2009 05:40:00 GMT

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

My understanding is yes, ...

Mon, 06 Apr 2009 04:10:00 GMT

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.

The $8000 credit is for your ...

Mon, 06 Apr 2009 04:07:00 GMT

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.