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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My son graduated from College and got a job in Connecticut

Resolved Question:

My son graduated from College and got a job in Connecticut for past past 2 years and resides in my home in New Jersey. Recently, he found a condo in Florida and would like to establish a new home there--can he take advantage of the new stimulus first time home purchase tax incentive using the new Florida condo residence and continue to keep his job in Connecticut for the meantime of economic crisis?
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.
HelloCustomer

In order to qualify for the first time homebuyers credit, the home being purchased must be used as your primary residence for the first 36 months following the date of sale. If at any time during the first 36 months the home ceases to be your primary residence, the credit must be repaid.

A home that you purchase with the intent to use as your primary home at some future date would not qualify for the credit. Unfortunately there are no exceptions to this rule based on the location of your job, or any other factors.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank youCustomerand let me know if you have more questions. I am happy to help you with whatever I can.



Customer: replied 8 years ago.
The home will be closed in next 3 weeks--does that qualify for the incentive?
Expert:  Merlo replied 8 years ago.
Hello againCustomer

The first time homebuyers credit applies to the purchase of homes where the purchase is completed by 11/30/09. So from a timing standpoint, the purchase is within the required deadline dates.

However, once he completes that purchase, he must then move in to the home and use it as his primary residence. He cannot rent the property or just let it sit there for 6 months or a year and move in at a later date, otherwise the credit would not apply.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank youCustomerand let me know if you have more questions. I am happy to help you with whatever I can.
Customer: replied 8 years ago.
By establishing the residence by using it as all tax filing and other mailings--if he continue with present job--would it be satisfactory for income tax and incentive purposes?
Expert:  Merlo replied 8 years ago.
Hello againCustomer

The IRS requires that in order to claim the first time homebuyers credit, the purchaser of the home actually live in that home and use it as his primary residence.

Obviously, the IRS really has no way of knowing whether or not the taxpayer is actually living at that address.

Where the problem may come in is if your son were ever to be audited, as at that time they would require him to substantiate that he actually lived in this home. They would of course look at things such as where he receives his mail, where his drivers license and car are registered, where he is registered to vote, where his bank accounts are and things of that nature. Where I see a potential problem is in the fact that your son would still be working in Connecticut. It would be difficult for him to show how he was using this home as his primary residence when he was working in another location that was over 1,000 miles away.

Again, this may only be an issue in the event of an audit. But you should be aware of that risk factor if you decide to claim this credit.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank youCustomerand let me know if you have more questions. I am happy to help you with whatever I can.

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