Home Selling in McAllen>Question Details

Thekittyfoof…, Home Buyer in McAllen, TX

I Bought a House w/husband then we refinanced & I'm NOT on Mtg Loan ,we divorced but my name is still on the deed. Do I qualify 1st Time Tax?

Asked by Thekittyfoofoo, McAllen, TX Thu Oct 22, 2009

Credit?? I have a question regarding the Tax Credit...
I was previously married and purchased a home with my Ex-husband. (We were NOT married when we purchased it FYI)
Then we refinanced and when we did.. we put the loan under JUST his name.
So I guess I'm still on the deed....
But we are divorced now and we didn't put anything about the house in the divorce papers because we settled things out of court and he kept the house. I didn't want anything to do with it... But I guess we never took my name off the deed. It wasn't an issue since the divorce was amicable.
Anyways. LONG story short...
4 years later I'm buying a home for myself and would like to know if I still qualify for the 1st time homebuyer credit :(
If you can help lemme know!
Thanks!
Mary

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Answers

7
IRS rules state that you must not have owned an interest in a home in the last 3 years. An interest would cover whether you lived there or not. You can read more about the rules on the IRS website

http://www.irs.gov/taxtopics/tc612.html and http://www.irs.gov/taxtopics/tc611.html

The first article 612 tells the changes from the 2008 credit, and article 611 gives you the basics for both the old tax credit and the current one that expires 11/30/09. You will probably want to read the FAQ page at the IRS website, too.
http://www.irs.gov/newsroom/article/0,,id=206293,00.html

The credit is 10% of the house price up to $8,000 purchased and closed BEFORE 12/'1/2009. This means you have to take title by then. The credit is applied to your 1040 tax form, not something you get at closing. Lenders will look at some types of tax credits to boost your buying power, but you cannot claim the cash - you just pay less in tax or get a bigger refund. Some states offer programs to lend you the tax credit and pay it back after you file, but it is too late (as a practical matter) to apply for those loans.

The 2009 program is a true "credit" in that you DO NOT have to pay it back, like the previous year's program, unless you fail to stay in the home for 3 years.

The credit is capped at $8,000. If you earn too much money, your "credit" will be reduced. The income limits are $75,000 for individuals and $150,000 for marrieds. These caps are modified adjusted gross income numbers. If you exceed the cap, then the "credit" is quickly reduced to zero.

This credit is specially designed for first time home-buyers only. You must also take care not to purchase from related parties.

If you still can't figure out whether you're eligible, ask your tax professional or call the IRS. They are probably inundated right now as are mortgage people and Realtors with the last minute rush.
Web Reference: http://www.SumnerRealty.com
1 vote Thank Flag Link Fri Oct 23, 2009
Would you mind sharing how did you resolve this situation?
0 votes Thank Flag Link Sun Jun 29, 2014
Did you ever talk to a real estate or tax attorney? That's a every good question by the way.

Rick Benavides
NeMont Realty
(956) 283-4082
Web Reference: http://www.ISellMcallen.com
0 votes Thank Flag Link Thu May 26, 2011
Thekittyfoofoo,

You have an interesting question. Long story short.... you are asking a legal question. A real estate attorney might be able to help you, but I would be looking towards talking with a TAX ATTORNEY. That would fall in their area of expertise.

My unexpertise opinion would be that you would not qualify under the current version, but you can hope that the talk in the senate is true in the fact that they are considering extending and expanding the tax credit to all buyers..
0 votes Thank Flag Link Fri Oct 23, 2009
There are often scenarios that don't fit the normal guidelines. We recommend a visit with a real estate attorney for the best insight on this matter.

Good luck
0 votes Thank Flag Link Fri Oct 23, 2009
irs.gov has some phone numbers to call. I have heard that the wait times are low and you get a human right away.
Give them a call.
0 votes Thank Flag Link Thu Oct 22, 2009
I don't think so, but you should check with your tax advisor.

From the IRS...

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

If your name is on the deed....then in my opinion you had ownership in a house. However it is not my opinion that counts....it is the IRS and you know how that works. I sure would hate to get 2--3-7 years down the road and then figure out they want their $8000 plus interest, plus penalties back.
0 votes Thank Flag Link Thu Oct 22, 2009
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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