First-time home buyer credit

[Joann]

Taxpayers filed single for 2008. They married in May, 2009. They are closing on a house next week. They want to amend 2008 returns to get the credit. They both qualify. Can I use the whole credit on one return or amend both returns and use half on each? Both names will be on the title and mortgage.

Joann

[mcb39]

Taxpayers filed single for 2008. They married in May, 2009. They are closing on a house next week. They want to amend 2008 returns to get the credit. They both qualify. Can I use the whole credit on one return or amend both returns and use half on each? Both names will be on the title and mortgage.

Joann

You will have to amend both returns since they were both single and each only entitled to one half of the credit at the time.

[kcjenkins]

I have to disagree with Marilyn this time. Since they were married when they 'earned' the credit, they can give it all to one if they choose to. I'd work it both ways and see which benefits them the most.

[mcb39]

KC is most likely right as the rules say that if two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method as long as the total amount does not exceed $8000 or 10%. Since your clients don't really fit into the rules; be prepared to prove your case when the IRS sends a letter asking for proof of purchase, copy of transfer tax, etc. They ARE checking into some (if not all) of these and, rightly so, as it was "just too easy" to claim the credit in 2008. I am glad that I only had three and that I saw the documentation on all of them.