Trying to make it work: Tax Edition
August 8, 2012 8:15 AM Subscribe
What is the best way around this mortgage and first time homebuyer tax credit situation?
posted by anonymous to Work & Money (11 answers total) 1 user marked this as a favorite
I purchased my first home at the end of April 2010. I qualified for the $8,000 tax credit and received it, which I immediately turned around and dumped into my mortgage. Whoo hoo!
Fast forward to now, August 2012. My living situation has changed and my boyfriend and I are planning on renting a place together starting October 1, 2012 for $3600 a month. I was planning on renting my place out starting October 1st for $2,500 a month. However, in doing paperwork last night, I noticed that the tax credit requires that my place by my permanent residence for 36 months. For whatever reason, I thought it was 24 months! :(
I'm now faced with this ridiculous financial jam. What is the best way around this, where the BF and I can live together and I don't have to repay the credit (is there a way??) living together in my place is not an option because of major space issues.
These are the options that I can currently think of:
1.) Stay put and don't live together until May 2013 - this is going to be a huge hassle and frustrating. However, I wouldn't have to repay the $8k. However, the time/sanity/money/frustration of not having a routine for another 7 months? I don't know if I can do this.
2.) Rent the place that we found for $3600 together (split in half; $1800 a month to me in rent) and rent my place out October 1st for $2500. My mortgage is $2000 now that I've refinanced. I would have to repay the $8k for my 2012 taxes.
3.) Live in my place until January and rent a different place with the BF. I'd have to repay the $8k on my 2013 tax return and we wouldn't be able to move into our dream place. There's no way that they would hold it for us.
4.) Rent the place we found for $3600 together but then don't rent out my place until 2013 - this would delay the repayment of the $8k until I do my taxes in 2014, but I'd have to cover my mortgage ($6000) plus rent ($5400) for three months I don't rent the place out ($11,400).
5.) Move into the BF's house (also not an option due to space issues and enviornmental issues for me) until April, then find a place in the spring?
What else? What would you do? Help me get through this, if at all. :(