Until the credit hits the IRS and is approved by the IRS- you will not know if you will get the total amount. If there is anything attached to your refund-child support, student loan, back taxes etc.. the credit will be used to pay this debt first then you will receive what is left if anything.
I think it might work if all the agencies work together to make sure the credit will be given out before giving the $8,000 upfront. I think if they don't there will be major problems.The IRS will not release the money if anything is attached so it will be hard on the people who took out the bridge loan if they are already stretched.
The IRS will use this credit to offset federal debts (student loans, back child support, back taxes) so not everyone will be able to get the bridge loan or maybe be stuck paying back the $8,000. It will be interesting to see how this will work.
Governor Steve Beshear and the Kentucky Housing Corporation have announced an initiative to provide up to a $4,500 for a down payment and closing costs for first time home buyers who obtain a loan through the KY Housing Corporation. The program will be administered by the KY Housing Corporation and will begin on May 1, 2009 and run through November 30, 2009. The First Home Advantage Program offers a 10 year loan that defers payment with a zero percent interest rate until July 1, 2010. After the initial deferment period, the loan will fully amortize over ten years at the rate of 6 percent. If the borrower pays off the loan before July 1, 2010, KY Housing Corporation will forgive $300 of the principal balance (Office of Governor Steve Beshear).
Anything over $13,000 is reported to the IRS. You may be required to prove where it came from and also taxed on any amount over this- it depends on your situation with your income taxes. You will want to have paperwork on where the money came from incase you are audited. It does not matter if she is another country- the money is being received in the US.
It is three years. If you can prove that in the divorce decree that you gave up your interest to the home then I think the time would start then. When you file your taxes you will want to take that decree to your tax professional- they can make a copy if needed to send to the IRS or to put in your file. I would also call the IRS to ask this question before you assume that you qualify- make a note of the date/time and person you talked to that gave you the answer. If a question does come up later on your tax return you can show this documentation. Also if something is attached to your tax refund (back child support, back taxes, student loans etc) this credit will be used to pay off the debt before you are given any money.
I would check with your local tax professional before assuming you are eligible for the credit even based on the other guidelines. You didn't earn a lot therefore you would have no tax liability for that year. Some of the credits (not sure about this one) are not allowed if you earn too little.
The First Time Buyers form is used to calculate what you are entitled to receive for the credit- it is carried over on your 1040 federal tax form. It is then added as a credit at the end of the 1040 form and is used to calculate if you owe or due a refund.If you owe $1000 to the IRS and are eligible for the maximum credit then what you owe will be paid first ($1000) and you will receive the remainder of the credit. If you have something attached to your tax refund (child support, student loan, back taxes) then this debt will be paid off first before you receive any money.
You will have to decide what interest each party holds in the property- a good question to ask yourself is “if you sold the house tomorrow how will the money be allocated?” If your parents are helping you and don't want anything in return then you might be able to take the full credit.
You are correct Sunnyview:)