Hi Bob,

You would qualify to buy the property if you have not owned a property in your name in the past 3 years. Since you guys would not fall into the married filing jointly, you're limited by your deductions and credits. As a single person, the first time home buyer credit would be ideal for your situation for now.

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You would seem to qualify if purchased in your name only but I'm not a tax professional.
http://www.irs.gov/pub/irs-pdf/f5405.pdf

Excluded parties are:
8. You acquired your home from a related person.
A related person includes:
a. Your spouse, ancestors (parents, grandparents,
etc.), or lineal descendants (children, grandchildren,etc.).
b. A corporation in which you directly or indirectly
own more than 50% in value of the outstanding stockof the corporation.
c. A partnership in which you directly or indirectly
own more than 50% of the capital interest or profits
interest.

For more information about related persons, see
Nondeductible Loss in Chapter 2 of Pub. 544, Sales and
Other Dispositions of Assets. When determining whether
you acquired your main home from a related person,
family members in that discussion (except item 7) include
only the people mentioned in 8a above.

Hope this helps,
Scott Dangremond
ERA Network Real Estate
Allegan, MI
(269) 512-2870

A very qualified "I think so". Presume you will buy it in your name only Presume it is a true sale where she sells it to you a true market price.

Bob,

I have included a couple links to information about the tax credit that you are referring to.

First Time Homebuyer Credit
http://www.federalhousingtaxcredit.com/

http://www.federalhousingtaxcredit.com/2009/faq.php