?? re: tax credit

[Anonymous]

From federal housing web site:

What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. 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. 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.

My ex & I were divorced during the year. The house we occupied was in his name only. I have not occupied a home listed in my name in more than 7 years. Am I going to qualify for the credit?

[Anonymous]

You just answered your own question, goingforadream.

In the example you just posted, if either you or your spouse

owned a home within the last 3 years, then both of you 

do not qualify for the tax credit. It's a shame the law is

written that way, but that's how it is now...

Logically, if the house is in only 1 person's name, then that

person alone shouldn't qualify. Maybe this will change over time,

but right now that's not the case.

CanDo

"The right attitude is everything"

[Anonymous]

That would really stink. I was hoping that since we are divorced and my filing status is HOH/single that I would be eligible for it.

[Anonymous]

I would think that the fact she is divorced would make a difference here. She doesn't presently have a spouse. Seems to me the intent of the law would be to prevent married couples from getting the credit by buying a new house in the non-owner's name.

[Anonymous]

Regardless, I'll be getting a refund from fed and state this year. So if it turns out I can't take the credit I'll just have to count my blessing where they come. And if I can take it---oh wow!

[Anonymous]

That's good to know, goingforadream.

At least that's one positive in your favor.

For married couples, the clock starts ticking

3 years from the date you bought the house.

I understand the intent of the law, but the law

also assumes that married couples made the

decision to purchase the home together.

On a positive note, the real estate industry is

pushing to expand the tax credit to $15,000

for married couples --- or $7,500 each for

husband and wife. If the 15k does come to pass,

perhaps they'll include a clause that allows each

person to use their share of the tax credit independently.

That way, if divorce does result sometime in the future,

the person not using their 7.5k portion can roll it forward

to the next purchase 3 years down the road.

We'll have to bide our time and see what happens.

CanDo

"The right attitude is everything"

[Anonymous]

I understand Cando

But just to throw another little bit of confusion in....what if he purchased the house before we were married (which he did)?

[Anonymous]

In that case, there might be light at the end of the

tunnel. 

If he bought it in his name, the 3 year clock started

for him ---- but not for you. You'd have to get some

documentation to support his purchase date, but

doing so should allow you to take advantage of the

tax credit.

Conversely, if he bought the house after you were

married, the 3year rule would kick in for both of you.

If you're in the market for a house now, I'd check with

your realtor and/or lender to verify this. But it sounds

like you should be OK.... 

CanDo

"The right attitude is everything"

[Anonymous]

One of the things I did walk away from that marriage with was the loan papers. I did so in order to have the documentation that I was in no way financially responsible for the house.

Another thing to add yet a bit more confusion is that he refinanced the house in his name only a few months before our divorce. We were seperated at the time but not yet legally divorced.

I closed on my house July 1, 08.

I think I'll let the tax dudes do my taxes this year....

[Anonymous]

Smart move on your part, goingforadream.

Even if you have to pay the "tax dudes" a couple of hundred

bucks to do your taxes, you'll be getting back $7,500 in

tax credits. So no matter how you slice it, that's a great deal.

I hope it all works out for you. Please keep us posted on

your progress cuz it's our collective experience that benefits

everyone. 

CanDo

"The right attitude is everything"