Home Buying in 64030>Question Details

Audra Berry, Both Buyer and Seller in Kansas

RE: Tax Credit Incentive - Rental property

Asked by Audra Berry, Kansas Sun Apr 26, 2009

I owned a past which I had rented out the past 3 years - I've rented in another city since then. I still own the house although it is for sale. I'm considering making an offer here on a house. Will I still qualify for the tax credit?

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Answers

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You should consult a qualified tax advisor, but my guess is that if your past tax returns clearly show that you have held a rental property and not a principal residence, then you likely can claim the credit. Again - do not make decisions based on any answers you get here, this is a tax question and most responders will be real estate agents, not tax professionals. Also, since this is a new law and grey areas may remain undefined, we really should not be giving you more than our best guess.
0 votes Thank Flag Link Sun Apr 26, 2009
Audra,
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

Hope this helps,
Sherri Oaks
Reece & Nichols-Blue Springs
365-8660
Web Reference: http://www.sherrioaks.com
0 votes Thank Flag Link Sun Apr 26, 2009
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