Comments on: Federal $8000 Housing Tax Credit Explained

By: Jay Thompson

Jay Thompson — Thu, 21 Jan 2010 03:47:27 +0000

Alan –

I can say with about 99.99% certainty that they will not *each* be entitled to an $8K credit. If that were the case, married couples all across the country would be enjoying a combined $16K in tax credits. Or people would be jointly buying homes together to “double-dip” on the tax credit. Neither of those scenarios are happening.

Since you are financing the purchase, they may not be eligible for a credit at all. See the IRS rules for form 5405 (the homebuyer tax credit form):

http://www.irs.gov/pub/irs-pdf/i5405.pdf

Homes that are gifts are excluded from the credit. As are homes acquired from a related person.

It’s not that big a stretch to see the IRS claiming since you are financing the home for your children that it’s a “gift” or that they’ve “acquired” it from you. Regardless of how the home is deeded, the IRS may not consider your children “buyers” as they have nothing to do with the financing. Things always get tricky with the IRS when it comes to transactions involving relatives.

However, I am not a tax professional, and you should seek the advice of a tax professional. This isn’t something you want to take any chances with.

By: Alan

Alan — Wed, 20 Jan 2010 20:49:19 +0000

I want to help my grown children become first time homebuyers and get full advantage of the Housing tax credit. I have identified a house for $200,000. They will each own a deeded undivided interst in 50% of the property. I will finance the full purchase price. They will use the house as their full time residence. Are they each entitled to $8000 credit?

By: Jay Thompson

Jay Thompson — Wed, 06 Jan 2010 21:22:19 +0000

Willy – I don’t THINK so, but I’d double check with a tax professional.

By: Jay Thompson

Jay Thompson — Wed, 06 Jan 2010 21:19:16 +0000

Mark – Yes, you’d have to repay the tax credit if the home ceases to become your primary residence within 36 months.

Straight from the IRS:

If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at the time the income tax return for the year the home ceased to be your principal residence is due.

By: mark tatko

mark tatko — Wed, 06 Jan 2010 20:30:33 +0000

If i get my tax credit at tax time and i sell my house for example this fall do i have to pay back the credit?? thank you

By: mark tatko

mark tatko — Wed, 06 Jan 2010 20:30:30 +0000

If i get my tax credit at tax time and i sell my house for example this fall do i have to pay back the credit?? thank you

By: Willy Gillis

Willy Gillis — Wed, 11 Nov 2009 12:36:26 +0000

I am closing on November 24th. The seller wants to do a rent back so he can stay in the house until December 5th. Will giving him this rentback mess up my receiving the $8000 tax credit. I'm not buying the house for renting it and will move in December 6th.

Thanks.

By: groupsource

groupsource — Tue, 13 Oct 2009 11:07:32 +0000

While many housing groups support extending the housing tax credit, others worry that an extension would cause consumers to postpone their decision to buy, rather than responding the urgency of an expiring federal credit. Economists also suggest that expanding the credit to all buyers is less effective economically than the current first-time buyer requirement.

http://betterblog.ning.com/profiles/blogs/feder...

By: real estate lead generation

real estate lead generation — Tue, 13 Oct 2009 03:53:36 +0000

I think the video is great! gives a nice detailed explanation and answers some questions that other videos on the tax credit don't answer

By: 1milker

1milker — Tue, 22 Sep 2009 02:55:39 +0000

Can my brother buy a hosue he rents from me and receive the housing tax credit? Tax forms just say etc. when describing relations. Is selling to a brother not allowed if he wants the credit? Thanks, Nick