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Lou, Tax Preparer
Category: Tax
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Experience:  25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
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I am in the midst of purchasing a home. I am a quarter owner

Resolved Question:

I am in the midst of purchasing a home. In 1986 my parents deeded their home to myself and my three siblings. I moved in with my mother in Sept. 2008 to care for her as she was diagnosed with cancer. I planned to live here temporarily as we knew she did not have a good prognosis. She passed away Jan. 3rd and I am living in the home until I close on my new home. Prior to moving in with my mother to care for her I rented and in 2003 I purchased a manufactured home with my then husband but I have not previously owned a permanent fixed home. Will I qualify for the new $8,000.00 first time home buyers credit? I did live in this home for nearly 8 months though I am not the only owner and I did have my address changed to this address and took over the phone bill in my name.
Submitted: 5 years ago.
Category: Tax
Expert:  Lou replied 5 years ago.

Hello and thank you for contacting JustAnswer. We appreciate the opportunity to be of service to you.

 

You pose a very interesting question. In the strictest sense of the definition you did own (even if only 25%) your main home for a period within the three years prior to purchasing your new main home.

 

Here is a link to IRS Form 5405 which has the instructions:

 

http://www.irs.gov/pub/irs-pdf/f5405.pdf

 

You will note that in the section "Who Can Claim The Credit" it is:

 

"You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase."

 

They are not clear about what constitutes ownership, however I would err on the side of caution and say you might not be eligible for the credit. Not only did you have ownership but you also moved in and it became your main home for nearly 8 months.

 

If you take the credit, and you get audited you would have to make the case that it was not your main home. There is no precedent for your issue as this is new ground for everyone. There is no way I can be sure what the IRS would do in an audit scenario.

 

I realize that my answer is not definitive but, under the circumstances I have no precedent to draw upon.

 

 

 

 

 

 

Lou, Tax Preparer
Category: Tax
Satisfied Customers: 404
Experience: 25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
Lou and 3 other Tax Specialists are ready to help you
Customer: replied 5 years ago.

is there a number i could contact for the IRS to ask someone. I would hate to loose out on an opportunity to take the credit if I did fall into the category of being eligible. I feel their "who can claim the credit" rules are very vague and I don't feel comfortable not looking into this further as it is a large sum.

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