Another ? on Homebuyer Credit

[Hoons]

What is the name of your state (only U.S. law)? IN

The tax software I'm using asks me the following question. Can anyone tell me if I'm interpreting this correctly?

"Was the home purchased after April 30, 2010, and before October 1, 2010, and did a binding contract for the purchase of the home before July 1, 2010, exist before May 1, 2010?"

My home closed on August 20, 2010.

The first part of the question is 'Yes'. I don't know if the second part applies to me. I'm reading that it doesn't apply because it says 'for homes purchased before July 1, 2010, a binding contract for the purchase must have existed before May 1, 2010.' Since my home was NOT purchased before July 1, then then I don't need a contract from before May 1 to answer 'Yes' to the question.

Am I reading that right or are any of you reading it differently?

If I don't qualify, I don't qualify. I'm terrified of thinking I qualify, submitting it and then being accused of trying to rip off the government. On the other-hand, I don't want to throw away $6,500 if I qualify.

 

[LdiJ]

What is the name of your state (only U.S. law)? IN

The tax software I'm using asks me the following question. Can anyone tell me if I'm interpreting this correctly?

"Was the home purchased after April 30, 2010, and before October 1, 2010, and did a binding contract for the purchase of the home before July 1, 2010, exist before May 1, 2010?"

My home closed on August 20, 2010.

The first part of the question is 'Yes'. I don't know if the second part applies to me. I'm reading that it doesn't apply because it says 'for homes purchased before July 1, 2010, a binding contract for the purchase must have existed before May 1, 2010.' Since my home was NOT purchased before July 1, then then I don't need a contract from before May 1 to answer 'Yes' to the question.

Am I reading that right or are any of you reading it differently?

If I don't qualify, I don't qualify. I'm terrified of thinking I qualify, submitting it and then being accused of trying to rip off the government. On the other-hand, I don't want to throw away $6,500 if I qualify.

Ok...the wording is confusing.

However, you needed to have a binding purchase agreement prior to May 1st, 2010, and you must have closed on the home prior to October 1, 2010.

So, if you meet both of those conditions, you are ok. If you do not, then you do not qualify.

 

[Hoons]

OK, looks like I'm SOL. I contacted the agent and he said since it was a refinance, no purchase agreement exists. But the bank told us that we couldn't refinance since my name wasn't on the mortgage, and that we would have to purchase the home outright. So the agent considers this a refi, while the bank considers it a purchase. I suspect the government will side with the agent.

Thank you for your response.

 

[davew128]

How could this POSSIBLY get confused? You either bought the place or you didn't.

 

[Hoons]

I completely agree. Before Aug. 20th, I didn't own a house. After the 20th, I did. I think the problem, according to the agent, is my wife. She owned the house with her ex before we 'bought' it. So he's calling it a refi.

I can only find that refinances don't count. But no where can I find the qualification criteria talking about a sale where one of the buyers previously owned the house with someone else.

I'm just trying to figure out how the Federal Gov't sees it.

 

[tranquility]

Per:
http://www.federalhousingtaxcredit.com/faq1.php#2

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. However, IRS Notice 2009-12 allows unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. 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.

 

[Hoons]

Per:
Federal Housing Tax Credit: Frequently Asked Questions About the First-Time Home Buyer Tax Credit

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. However, IRS Notice 2009-12 allows unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. 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.

tranquility, I'm looking into the 'Move Up' homebuyer credit rather than the First Time Homebuyer.

 

[LdiJ]

tranquility, I'm looking into the 'Move Up' homebuyer credit rather than the First Time Homebuyer.

You don't qualify for that either. Your wife owned the home previously. The IRS would reject it out of hand because its both her current and "new" address.

This is one where the IRS hand scrutinizes EVERY return because their has been so much fraud.

 

[Hoons]

Well I'm not interested in breaking the law. I just hoped we qualified. Thanks again all for your responses.