Am I Eligible For The D.C. First Time Home Buyer Credit?

Hello and thanks in advance for your help,

Am I eligible for the D.C. First Time Home Buyer Credit if I have to repay the federal First Time Home Buyer Credit because the home ceased to be my primary residence after 12 months but before 36 months?


The D.C. First Time Home Buyer Credit required me to apply for the federal first time home buyer credit. However, the latter requires the home to be the primary residence not just 12 months (required for the former), but 36 months. After 12 months, the home ceased to be my primary residence due to a change in employment. The IRS representative (1 800 919 0352) said "No" because one cannot apply for both credits and since I applied for the federal credit and got it, now I cannot apply for the D.C. credit even though I must repay the federal credit. However, I am still wondering if an accountant can verify or provide any explanation as to why I am being denied any credit given that I had no choice but to apply for the federal credit. Afterall, the D.C. First Time Home Buyer Credit was in place before the Federal Credit so the federal credit is actually hurting me because otherwise I was eligible for the D.C. First Time Home Buyer Credit.

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Basis For Inherited House

by John
(Reno, OH, USA)

My wife's mother pasted away in 2008.
My wife inherited her house.
The house was appraised at $230,000.
A new roof was placed on the house in 2009 at a cost of $7,300.
The house was sold at a loss in 2010 for $168,000.
At the closing, the mortgage was paid off in the amount of $73,000.
The realty & closing costs were $14,000.

I think the basis for the house is:
Appraised value: $230,000
+ new roof: 7,300
+ realty & closing 14,000
--------------
Total basis value $251,300

So, the house sold for $168,000 with a loss of $83,300.

My question is:
How does the mortgage payoff of $73,000 enter into the picture?
Should we count the mortgage as part of the basis?

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First Time Home Buyers Credit

by John
(CA)

What can you tell me about the first time home buyers credit? I purchased my first home in 2008 and would like to figure out if I can take the credit.

There are a lot of people wanting more information on this one. Please see the article below by Stephen K. Cooper, CCH News Staff

Increased First-Time Homebuyer Credit May Be Claimed for 2008 or 2009 (IR-2009-14; TDNR TG-39)

The IRS has announced a taxpayer-friendly option for individuals and married couples who qualify for the first-time homebuyer credit under Code Sec. 36, as amended by the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5). Taxpayers qualifying for the amended credit have the option to claim the Code Sec. 36 credit on either their 2008 or 2009 tax returns.

The 2009 Recovery Act increased the maximum credit allowed under Code Sec. 36 from $7,500 to $8,000 ($3,750 to $4,000 for married filing separately). To qualify for the increased credit, the home must be purchased after December 31, 2008 and before December 1, 2009. The credit, as amended, does not need to be repaid as long as the home remains the purchaser's principal residence for 36 months after the purchase date.

A spokesperson at the Joint Committee on Taxation told CCH that the issue of whether the technical language of the Act supports the use of the $8,000 amount for credits claimed on 2008 returns for 2009 purchases, or whether the $7,500 amount should apply, had been debated among staff members. Their conclusion was that the congressional intent was to allow the $8,000 amount for all 2009 purchases, regardless of whether the credit was claimed on a 2008 and 2009 return. The staff economists then used that conclusion in determining the final revenue estimates assigned to this provision, as published in JCX-19-09.

CCH Comment. The changes made to the first-time homebuyer credit by the Act are effective only for residences purchased after December 31, 2008. This makes clear that the increased $8,000 cap on the first-time homebuyer credit only applies to residences purchased from January 1 through November 30, 2009. The $7,500 cap still applies to homes purchased in 2008. The language providing for an election to treat a 2009 purchase as if made in the prior year was also revised by the new act. Code Sec. 36(g) states that, in the case of a purchase of a principal residence after December 31, 2008, and before December 1, 2009, a taxpayer may elect to treat such purchase as made on December 31, 2008, for purposes of Code Sec. 36 other than Code Sec. 36(c), the definitional subsection, and Code Sec. 36(f)(4)(D), the subsection addressing the waiver of recapture for purchases in 2009. Under a technical reading of the statute, therefore, an election to treat a residence purchased in 2009 as if made on December 31, 2008, would subject the purchase to the $7,500 dollar limitation applicable to 2008 purchases under Code Sec. 36(b). The IRS appears to have decided, however, to allow residences purchased in 2009 to qualify for the $8,000 limit even where the taxpayer elects to treat the purchase as if made on December 31, 2008.

A revised version of Form 5405, First-Time Homebuyer Credit, has been posted on the IRS website (www.irs.gov/pub/irs-pdf/f5405.pdf) incorporating changes made by the Act.

In addition, the IRS reminds taxpayers that amended Code Sec. 36 does not apply to people who actually purchased a home after April 8, 2008, and on or before December 31, 2008. These taxpayers, who are claiming the credit on their 2008 tax returns, are limited to a maximum credit of $7,500 (or $3,750 for married individuals filing separately). In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

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First Time Home Buyer Tax Credit

I would like to know if I qualify as a first time home buyer. My dad purchased me a mobile home ten years ago and placed it on his property. His name was first on the title, and my name was second. The land was in his name, and all the tax notices on the property and mobile home were sent to him at his address. The mobile home has been sold, and I have now just built a new home on an acre of land he had deeded over to me. I am fixing to close on the home in the next week or so, and I was wondering with this scenario, if I qualified as a first time home buyer??

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First Time Home Buyer Question

by Joe
(San Francisco, CA)

I have already filed my 2009 taxes. I just bought a house and I'm eligible for the first time homebuyer tax credit. I went into contract before april 30 and will close beginning of may. Can I some how file an extention so that I can receive the tax credit for 2009. How do i do it?

Hi Joe,

Thank you for your contribution. I believe you should be able to amend your 2009 tax return to include the first time home buyers credit that you are now eligible for.

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HOSTEL UNDER PREVIEW OF ACCOMODATION

by DINESH KUMAR
(ASSAM)

IS HOSTEL COME UNDER THE PERVIEW OF ACCOMODATION AS PER INCOME TAX??.

MY EMPLOYER PROVIDED ME A HOSTEL TO RESIDE ONE SIDE HE IS NOT GIVING ME HRA AND ANOTHER SIDE HE IS CONSIDERING HOSTEL AS ACCOMODARTION AND CHARGING PERKS?

KINDLY ADVICE WITH ANY REFERENCE TO ANY CASE LAW IF ANY.

THANKS

CA DINESH KUMAR
9435009675
cadineshkumar33@gmail.com

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House Fire

by Susan
(Lakeland, Fl)

My rental property had a fire. Do I pay taxes on the insurance money I received to make the repairs on the house? I called the IRS, got put on hold for 45 mins. was transferred to another department, was told this was the wrong department, was transferred again and was disconnected! I have given up getting help from the IRS.

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House Purchase Deduction?

by Joan Farrenkopf
(Wilmington, NC)

Is the money put down on a purchase of a home, not for personal use but to rent commercially considered a tax deductable expense?

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House Sold at a Loss


(USA)

What happens tax wise if you sell your house for less than you bought it for?

Thank you for your question.

Nothing happens tax wise when you sell you house for less than you bought it for. In other words, you cannot take the loss on the sale.

You can only take a loss on the sale of an investment or rental property.



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Multiple Houses

by Bob
(Virginia)

My mother in law moved in with us a little more than a year again and unfortunately passed 3 weeks ago. We rented her house out when she moved in with us and now want to sell it. Will we have to pay capital gains taxes on it? My wife owns the home now and her name has been on the title the last 4 years.

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New Home Credit

We built a home but this is not our first home. Can we claim a credit? If so, how do we do this.

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Purchsing a New Home

by Don
(Dallas Tx)

Can money from a 401K, or IRA be used for a down payment on a new home?

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Purchase of a Building

by Donna
(Kentucky)

I purchased a building this year and paid 10,000 dollars down on the building can and where do I take this amount off on my taxes and do I depreciate the building and how?

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Question

by catrina hernandez
(visa)

i've been married 6 months.have a 5 month baby,can i claim them as dependents ?

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Rehabbing a House

In April my wife inherited a duplex that was not habible. We started the rehab in october and it was completed in July. For tax purpose do you just claim the renovation cost for 2009 and 2010? Is there any depreciation since she inherited the property? Thanks

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Sale of an Investment House

How do I report income from the sale of a house I bought as an investment?

Hello,

Thanks for your inquiry.

Sale of a house bought as an investment is reported on Schedule D, Capital Gains and Losses. You will need to know the purchase date, purchase basis, sales date, sales price. You can include in your purchase basis all closing costs and improvements made to the property as well.

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Short Sale (1099-C)

by Mark
(Aurora, Colorado)

Hi ,I finished the short sale of my home in California in June 2009. I had 2 loans with 2 different mortgage companies(80-20). I lived in the house from Aug 2005 until January 2007. Then I rented out the house until Dec 2008, because I moved to Colorado. I'm renting an apartment here in Colorado, so I don't have any other property aside from the house in Calif. The house in calif was empty since dec 08 until june 09, when the shortsale was completed. I originally bought the house for 320K, the shotsale was for $150. I received my 2 1099-c, although the forms say that the FMV is $320K (??). Is it considered my main home? I didn't have other properties, but didn't live in that house at the end (it was empty). do I pay taxes on it? what forms do I fill out? I'm filing my taxes via Turbotax, but I don't believe the questions asked by the software are really helpful to make sure I'm doing it right.
Although I didn't rent the house in 2009, I got a 1009-Misc, because I received my deposit back, so I'm afraid that by adding that info, I will have a Rent form submitted, but on the other side, I'm trying to say that I didn't rent the house that year, AND... that It's my main home....

Thanks

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Sold Residence Note Defaulted Upon.

by William
(Somewhere In FL)

I bought a house for about $100,000 twenty years ago, lived in it for fifteen years, and then sold it. I sold if for about $200,000 but only got $1,000 at closing and have been taking the remainder in installments (I hold the first mortgage.) The remaining principle is about $50,000 less than the value of the house and the owner is about to default. If I refinance him at the current value, erasing this $50,000 amount, can I deduct this loss on my taxes - $3,000 each year. Thanks!

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Tax Treatment For 2nd and 3rd Homes

by Bruce
(Pismo Beach, CA)

I had two houses at the beginning of 2009, a primary residence and a second home. I used the second home from the beginning of January until the end of April. During May and June, I prepared the house for rent by cleaning and painting and doing repairs. I ultimately rented the home in July and it remained rented throughout the year. I pay for a mortgage and taxes on this home.

During August, I purchased a third home as a vacation home and used it exclusively for personal use. I pay for a mortgage and property taxes on this 3rd home.

Can anyone give me advice on the proper tax treatment for the second and third homes?

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