Not a question about first time home buyer credit but????

[Tax Prep by Deb]

I have a client who has owned a home for the past ten years. The home was originally purchased when she was married to husband no 1.

Since the divorce, husband no.1 and my client have continued owning the home together with my client living there and raising their two children. My client re-married two years ago and is now in the process of purchasing a home with husband no.2.

I know they will not qualify for new home buyer credit (8,000) but what about the 7,500 credit? She has lived in this home for the past 10 years or so, but new husband has not. Does that mean they don't qualify?

Any thoughts!

Deb! :scratch_head:

[mcb39]

Deb, the credit is $6500. Where did the new husband live? Did he own a home also? I have a feeling that she won't qualify, but you can do a lot of searching before you find the answer and then still not be absolutely sure that it is the right answer. Good luck on this.

[Tax Prep by Deb]

Deb, the credit is $6500. Where did the new husband live? Did he own a home also? I have a feeling that she won't qualify, but you can do a lot of searching before you find the answer and then still not be absolutely sure that it is the right answer. Good luck on this.

New husband has not owned a home in the past three years. In fact for the past three years he has lived with his now wife but never on title or anything to do with the home as it is still owned by husband no. 1 with husbands no. 2's wife.

This is the strangest divorce I have ever seen, but both parties are happy and totally agreed to everything without hiring attorneys, going to court, ect...

Anyone else have an opinion?

Deb!

[Lion EA]

For purposes of this law, if you're married to someone who owns a principal residence, then you too own a principal residence. Too bad they won't wait a little longer before buying a new home.

[jainen]

>>you can do a lot of searching before you find the answer and then still not be absolutely sure that it is the right answer<<

I can't be absolutely sure it is "the right answer" but it does not take a lot of searching to find "the answer." According to the IRS in the Q&A at My link, "Both spouses must have owned and used the same previous principal residence." And just in case you missed it the first time, they say it over again.

[Tax Prep by Deb]

>>you can do a lot of searching before you find the answer and then still not be absolutely sure that it is the right answer<<

I can't be absolutely sure it is "the right answer" but it does not take a lot of searching to find "the answer." According to the IRS in the Q&A at My link, "Both spouses must have owned and used the same previous principal residence." And just in case you missed it the first time, they say it over again.

Thank you Jainen. In researching this I was looking mainly at the scenerio's section and for some reason didn't even look at frequently asked questions. (I feel soooooo dumb)!

It's been said about KC that when we grow up we want to be like her, well the same goes with you. Even though sometimes you come across a bit harsh, I trulllllly appreciate anything you contribute. You are the type of person I would want preparing my taxes as I have trust and confidence in your opinions.

Again thanks for the link!

Deb!

[mcb39]

I am also thankful for that link. I tried to find it but couldn't find this current version. Too many different scenarios on the mind these days. It gets hectic when the phone is ringing just when I am concentrating on some subject or other. Now the questions start as to how their returns are looking. From my view they are looking like they are on a pile on the floor and will be gotten to in the order in which they came in. (Some exceptions apply and I don't say any of that to the clients). Anyway, I have gone to the woods for the weekend and brought a lot of work along. Then, on Monday I am having another gal come in to help me out with data entry. She is also a preparer trying to get her business off the ground. Enough self-abuse for me, especially with two eye surgeries this year as well as the two that my husband had.

[jainen]

>>I have trust and confidence in your opinions<<

Thank you very much. I must remind you, however, I have often stated that the positions I take on this forum are not necessarily the same positions I take with my own clients. For example, I honestly believe the IRS may be wrong in their interpretation that both spouses must have occupied the same residence, but I am not supporting that opinion with any link.

[Tax Prep by Deb]

>>I have trust and confidence in your opinions<<

Thank you very much. I must remind you, however, I have often stated that the positions I take on this forum are not necessarily the same positions I take with my own clients. For example, I honestly believe the IRS may be wrong in their interpretation that both spouses must have occupied the same residence, but I am not supporting that opinion with any link.

I understand, however your opinions do often make us think in ways that perhaps we haven't considered. I don't always agree 100%, but I do respect you in many ways. The bottom line is that we have to act in the best interest of our clients within the scope of the law and even within the IRS circle there are many situations that they can't even agree with. I had a situation like that many years ago and the agent I was speaking to admitted even they didn't know how to handle the situation. She told me to go with whatever benefited my client, document our conversation, she even told me that if it was ever questioned to use her agent # and name as the authority I relied on.

In the case of this original post however, I printed the information and handed it to my clients. They stated that the bank said husband #2 would qualify for new home buyer credit, but my client said he knows other in the business that he would talk to. I asked him that if he found someone who stated differently than the info I printed, to please ask for source info and then please call me as I am always eager to learn. I still haven't heard back from them.

Deb!