Tax Credit - Will I qualify?

[shtws]

My BF and I will be purchasing a home before the deadline.  He is purchasing from his parents and his income exceeds 95K a year so he cannot claim the tax credit.  My income allows me to qualify for the tax credit but will I actually receive it since he's purchasing from his parents?  

[Anonymous]

This is from form 5404:

Line 1. If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount
allocated cannot exceed the smaller of $7,500 ($8,000 if you purchased your home in 2009) or 10% of the
purchase price. See Purchase price on page 3.

Part II Credit
Note. A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is
not eligible to claim that part of the credit.

I think what they are saying is that if you are buying a house with a non-spouse, you guys can split the credit. But if one of you is ineligible for the credit, that person can't take part of the credit,  So I think you would get half of the 8k.  But contact a tax professional or someone here who may have better insight.  

[Anonymous]

Found more:

http://www.irs.gov/pub/irs-drop/n-09-12.pdf

This is the rule regarding two unmarried persons when one does not qualify as first time homebuyer: (anyone might want to look at this link, because there is futher clarification that outlines the allocation of the credit based on form of ownership, percentage of ownership, and respective down payment

Example 4.
A and B each contributes $50,000 towards the $100,000 purchase price of a residence and owns a one-half interest in the residence as tenants in common. Under § 36(b)(1)(A), the allowable credit is not $10,000 (10 percent of the purchase price) but
is limited to $7,500. However, B is not a first-time homebuyer within the meaning of § 36(c)(1). Therefore, no portion of the credit may be allocated to B because B is not eligible to claim any portion of the credit. A may claim the entire allowable $7,500

[Anonymous]

If you buy the home from a relative, you won't qualify for the $8000 first time home buyer tax credit.

[Anonymous]

According to the IRS, you cannot take the $8000 first time home buyer tax credit, even if you buy a principal residence, if:

1. Your income exceeds the phase-out range. This means joint filers with modified adjusted gross income of $170,000 and above and other taxpayers with modified adjusted gross income of $95,000 and above.

2. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.

3. You stop using your home as your main home.

4. You sell your home before the end of the year.

5. You are a nonresident alien.

6. You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year.

7. Your home financing comes from tax-exempt mortgage revenue bonds.

8. You owned another main home at any time during the three years prior to the date of purchase. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another main home at any time from July 2, 2005, through July 1, 2008.

[Anonymous]

If she could qualify for the house on her own and bought the house from her BOYFRIENDS parents she cant get the FTHBC?

[Anonymous]

Hard to say... best to call the IRS hotline and see what they have to say about it.

[Anonymous]

Also, her post says her boyfriend is purchasing the home with her. It doesnt' mention anything about her being able to qualify to purchase the home by herself. She is just stating that she would qualify for the tax credit because she doesn't exceed the income limitations.

[Anonymous]

Well yeah, that is why i posted IRS info regarding purchasing a home with a non-spouse. 

[shtws]

Thanks for both of your input. 

1.)  I read that notice on IRS that you cannot claimed tax credit if purchase from family.  I'm technically not purchasing from a family.  It is my boyfriend's family.  Since he doesn't qualify either way, I am hoping that I can claim the full amount.

2.)  I will not qualify on my own to purchase the house and we both want to be on the mortgage loan so that is not a option.