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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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First time homebuyer question. In the 530 tax form it stat

Customer Question

First time homebuyer question.
In the 530 tax form it states that (You may be able to claim a one-time tax credit of up to $7,500 ($3,750 if married filing separately), or 10% of the purchase price of your home (whichever is smaller), if you are a first-time homebuyer. You (and your spouse if married) are considered a first-time homebuyer if: Then goes on to list eligibility.
Further down in the form it goes on to say (You cannot claim the credit if:
#7 You acquired your home by gift or inheritance.
#8 You acquired your home from a related person.

My Question:
If the home is inherited by several siblings, and one sibling wishes to aquire a mortgage and purchase the portion that is owned by two of the siblings would the sibling getting a mortgage be eligable for the first time home buyers offering?
Submitted: 4 years ago.
Category: Tax
Expert:  Milan Vaishnav replied 4 years ago.

Dear Friend,

 

In my opinion, YES... the sibling may be eligible for first time homw owners benefits as she /he would be buying out the share / portion of the other two which are NOT acquired by gift or inheritance by him/her.

 

I hope the above helps...

Regards,

Customer: replied 4 years ago.

 

Thank you for your reply. In your reply you noted that due to the fact that the share/portion of the two siblings are NOT acquired by gift or inheritance, therefore the sibling buying out the shares/portion would be entitled to the first time home buyer offering. Just want to make sure that your answer took into consideration that originally the two siblings did acquire their share through inheritance.

 

Second part of my question: In the event some of the other siblings with shares/portion do not require to be bough out, and are in agreement that the one sibling can move forward and acquire a mortgage to buyout the portions of the two mentioned above, would the sibling acquiring the mortgage, still be eligible to take advantage of the first time home owner offering? I realize this is not your everyday question regarding the first time homebuyer qualifications; however it is very important to me to find out if I will qualify and the documentation is vague. I look forward to your feedback.

Expert:  Milan Vaishnav replied 4 years ago.

Dear Friend,

 

I feel this requires detail and expert interpretation of IRS provisions of first time tax payers benefits.

 

I am therefore, opting out and transferring this to TAX Category wherein the tax expert may help you.

 

Warm regards,

Customer: replied 4 years ago.
When you send this question to the TAX category are they going to expect additional payment for my question? I was under the impression when I orginally asked the question, that it was going to be answered by a tax expert.
Expert:  Milan Vaishnav replied 4 years ago.

Dear Friend,

 

You had posted your question in Finance catagory and not Tax. You have not paid anyone until now and You will not have to pay twice. Somebody from tax will attend your this question.

 

Warm Regards,

Customer: replied 4 years ago.
Very good. I look forward to receiving the answer to my question. Thank you.
Expert:  Milan Vaishnav replied 4 years ago.

Dear Friend,

 

You are welcome..

 

Warm Regards,

Customer: replied 4 years ago.
Milan, do you think I will receive an answer sometime today? So far I have not recieved an email introducing the Tax analyst who you turned the question over to that will be answering my question.
Expert:  Anne replied 4 years ago.
Hi Rosebud

Thank you for using justanswer. Unfortunately given the information you provided, the sibling would NOT qualify for the first time home buyers credit, because the home is inherited.

I wish I could have told you differently, but I suspect you knew this and you were looking for confirmation that you were correct.

I hope this helps.

Edited by Anne on 1/3/2010 at 5:02 PM EST
Customer: replied 4 years ago.
Ann, My question pertains to the sibling aquiring the mortgage. Since only a small percentage of the home will be inherited by that sibling, and it requires them to obtain a mortage in order to keep the house the question is... Can they take advantage of the first time home buyer credit.
Expert:  Anne replied 4 years ago.
Unfortunately, I can find nothing in the tax law that states the first time home buyers credit is available for people who only inherited a % and then "bought out" the additonal inheritors. It is my belief that inheriting any portion of the home will make a person ineligible for the credit, but I am going to opt out and put this question back on the board to see if another tax pro has additional information regarding this situation.
Customer: replied 4 years ago.
Anne, Thanks for your reply, and for putting the question back on the board for other professionals to veiw in case they have additional information to share.
Customer: replied 4 years ago.
Anne, do you have any idea how long I might expect it to be before I can expect feedback regarding my question?
Expert:  Anne replied 4 years ago.
I'm sorry I don't. Sometimes if the other experts agree with the posting expert, as in this case, (another expert agreed with my interpretation of the tax code re: first time home buyers and inherited homes) there is really no other interpretation they can find and the answer stands.

Whether that is the case, I can't tell you. I can tell you that I ran this question by my co workers (today was the first day that the local tax offices were open) and they too agreed with me. We understand your position, that the sibling is purchasing the portion of the home he DIDN'T inherit, and we thought it was a good question, but again, there was nothing we could find in the tax code that treated a partial inheritance any different than if you had fully inherited the home.

I will leave this on the board for you as an open question, but that's really all I can do, since I still stand behind my original answer. (This was a GREAT question though)
Customer: replied 4 years ago.
Thank you for your quick response. If I click the accept button now, will I still receive feedback in the event someone has something to add to your response? And by clicking accept does that mean I will not be able to ask more questions throughout the month under the payment I already setup through PayPal?
Expert:  Anne replied 4 years ago.
If you accept my answer, that will close this question, and nobody else will be able to add anything to it unless you relist it.

I've never been a customer on this site, but the way I understand this to work is that everytime you post a question, you also post an amount you are willing to pay for that question. You may not ask different questions under the original posting as that question eventually closes, either by your acceptance of the answer, or by the time expiring. Each question is contracted separately, but you may use the same pay pal account each time, just as you would pay different vendors from your checking account.
Expert:  Anne replied 4 years ago.
I have "opted out" again for you to leave this question open on the board. I hope you get some results.

Edited by Anne on 1/7/2010 at 4:12 AM EST
Customer: replied 4 years ago.
Anne, thank you for your feedback and for leaving this question open on the board. Your responses are appreciated.
Expert:  Robin D. replied 4 years ago.

HelloCustomer

Anne is correct in her understanding. There is no fractional inheritance that would be taken into account for the firsttime home buyer credit. Also, because you would be purchasing your home from your siblings (even just a portion) you would not be allowed to use the credit because they are considered closely related to you.

You may want to just click on accept for Anne if you still can since that expert has worked with you extensively on this subject and she is correct.

Thank you and best regards,

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