Question on Housing credit for first time buyers

[crucifixion]

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

I had a question on the rules of what is considered a "first time" homebuyer.

I was reading the IRS rule and it said:

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married,
did not own any other main home during the three-year period ending on the date of purchase.

I bought a Simi Valley, CA townhome in 2005 when I was single. I got married in 2007. Now my wife and I are planning on buying a house jointly,
so technically, as a married couple, this would be our first home purchase, as both of our names are not on the Simi Valley home, just mine.

I know its a stretch, but do you know it my wife and I qualify?

If we bought the house in only my wife's name, then would she qualify for the credit, or the fact that I have a house in my name mess that up?

 

[Indiana Filer]

My understanding is that you do not qualify for the credit since you have owned a home in the last three years, even though your wife would qualify. If the home is in just her name, she should be able to qualify, based on the info you provide.

 

[tranquility]

There's some guidance that just came out, but I don't have it at my fingertips and am not going to try to find it before the 15th. Hit the IRS website, they may have a press release or some other thing telling the answer. (Although, I don't disagree with Indiana Filer. It's just I don't have a specific memory and know something just came out in the last couple of months.)

Internal Revenue Service

 

[LindaP777]

"Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase date".
this is you


Federal Housing Tax Credit for First-Time Home Buyers: Home

$8,000 First-Time Homebuyer Tax Credit
As Modified in the American Recovery and Reinvestment Act

EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
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Amount of Credit
Lesser of 10 percent of cost of home or a maximum of $8,000.
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Eligible Property
Any single-family residence (including condos) that will be used as a principal residence
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Refundable
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. Refunded to purchaser by check or direct deposit.
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Income Limit
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out gradually above those caps to $95,000 and $170,000.
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First-time Homebuyer Only
Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase date.
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Revenue Bond Financing
Purchasers who utilize revenue bond financing can use credit.
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Repayment
No repayment for purchases on or after January 1, 2009 and before December 1, 2009
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Recapture
If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
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Termination
November 30, 2009 is the final date you must close by to claim the tax credit
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Effective Date
All revisions are effective as of January 1, 2009
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IRS Form
The IRS requires Form 5405 (First Time Homebuyer Credit) to be filed with your Federal Income Tax 1040 form to claim the First-Time Home Buyer Tax Credit. The same form is for those taking the 2008 or 2009 version, and can be used toward 2008 or 2009 taxes. If you have already filed your 2008 taxes, use IRS Form 1040X along with Form 5405 to Amend your 2008 tax return. For amendment questions and how to use Form 1040X, see Instructions for Form 1040X. If you already received the $7,500 First Time Home Buyer Tax Credit for a home purchase in 2009, use these same forms to receive the additional $500.

 

[Indiana Filer]

(Although, I don't disagree with Indiana Filer.

Internal Revenue Service

Feel free to disagree. You know a lot more than I do!