Homebuyer Credit

[jr1040]

Must admit I'm tired and lazy.

Two women live together. Present home in name of one person. They are buying a new home. Both will be on deed.

The one who owns present home can qualify as a buyer for long time resident credit. The other could qualify as

a first time home buyer. They file separate returns. Is there any rule that says they each can't take the credit

that they qualify for?

[jainen]

>>any rule that says they each can't take the credit<<

None at all. In my opinion, they can certainly each take the whole credit. They can't BOTH take the whole credit, however.

[grandmabee]

>>any rule that says they each can't take the credit<<

None at all. In my opinion, they can certainly each take the whole credit. They can't BOTH take the whole credit, however.

are you saying one can take 4,ooo and the other 3250? but it would be better if one took the full 8,000

[Lion EA]

4000 and 4000. 6500 and 1500. 0 and 8000. Any amount that does not exceed 6500 for the long-time buyer and that does not exceed 8000 for the house. Is that right, Jainen?

[Margaret CPA in OH]

This is an interesting situation. If the credit is split, would that also require that the purchase price be split according to some formula? If so, wouldn't the applicable credit possibly be limited by the accompanying cost? Maybe the cost is high enough to accommodate without an issue but how would the cost be allocated? By contributions towards downpayment, relative income, other? Just curious... And I hope I never see another one of these. Bad experience from the first one...

[grandmabee]

they can allocate any way they want as long as they meet other qualifications

[Lion EA]

The IRS used a phrase something like "by any reasonable method."

[Margaret CPA in OH]

Ahh, reasonable, how refreshing! Would that all tax law and regulations were reasonable, eh?