Favorite topic: new homeowner credit

[schirallicpa]

Question #1 Lady sell her old house and makes deal with young couple to buy a new house with them. They are first time buyers. They have applied for and received credit. Now lady wants to know if she can get a credit too. All 3 names are on the settlement stmt. I believe they should have made an allocation to begin with, but I'm asking for any others' opinions. And would they have been limited altogheter to her credit or $6500?

Question #2: For a newly constructed home how is the "purchase price" determined? In this case, he's a contractor and has built his house as he's been able to, and has not kept good record. (As would be the case with most contractors, right?) Anyway - he gave me an estimate. Has anyone been in a situation where they had to come up with proof yet?

[jainen]

>>As would be the case with most contractors, right?<<

No. Generally professionals are, well, professional.

The purchase price for purposes of the credit is the adjusted basis on the day the constructed property is first occupied as the principal residence.

[mcb39]

Question #1 Lady sell her old house and makes deal with young couple to buy a new house with them. They are first time buyers. They have applied for and received credit. Now lady wants to know if she can get a credit too. All 3 names are on the settlement stmt. I believe they should have made an allocation to begin with, but I'm asking for any others' opinions. And would they have been limited altogheter to her credit or $6500?

Question #2: For a newly constructed home how is the "purchase price" determined? In this case, he's a contractor and has built his house as he's been able to, and has not kept good record. (As would be the case with most contractors, right?) Anyway - he gave me an estimate. Has anyone been in a situation where they had to come up with proof yet?

Re: Question 2....a contract is not a requirement for applying for this credit. An Occupancy Permit is. I just finished one of these. My client does have the original bid, which we will send along, but is not asked for at this time. Why would a contractor not necessarily keep good records? I would think being in business is all the more reason to do so. As long as you can prove $80,000 or more; or as in my case,$65,000 or more, you qualify for the credit if all of the other criteria is in place.

[jainen]

>>They have applied for and received credit. <<

I don't think the credit depends on who files first. She should discuss this with her housemates so everybody agrees on what is fair. They should be willing to deal with her, because otherwise they are going to get audited by the IRS.