Do we have to repay the first-time home buyer credit? [scenario inside]
April 26, 2012 8:02 PM   Subscribe

I am buying a new house in my name only. My wife and I received the 2009 $8000 tax credit for first time home buyers, and have not lived here the required 3 years. The house was purchased in her name and she will be staying at the old house. Do we still have to repay the credit?
posted by idyllhands to Work & Money (5 answers total)
Most likely yes. I have known people who have been through divorces and have ended up in this exact same scenario.
posted by roboton666 at 8:12 PM on April 26, 2012

You looked at the IRS page that covers this? If not, I'd start there. This is the quote and then there's a link for more info at the bottom.

Divorced Persons

If you (transferor spouse) transfer your main home to a spouse or former spouse (transferee spouse) under a divorce decree, the transferee spouse who keeps the home is responsible for repayment of the entire credit if, during the 36-month period after the purchase of the home, the home ceases to be his or her main home. You (transferor spouse) are not responsible for any repayment of the credit. (1/6/11)
posted by jessamyn at 8:14 PM on April 26, 2012

jessamyn: Does the IRS consider living separately to be divorcing? Otherwise, I am not sure this could apply. Also, there is no transferring of house occurring as she will be staying there.

The problem I am having figuring this out is that the instructions refer to the credit recipient as "You." If we filed jointly for 2009, but my wife was the one who actually got the loan and bought the house, does this "You" refer to us collectively or only to her as the credit recipient? Anyone know what the standard is for tax code in these situations?
posted by idyllhands at 8:43 PM on April 26, 2012

I just found this and answered my own question. It looks like at very least I would be paying back half of the credit:

Publication 504

Your first-time homebuyer credit is limited to $4,000 (instead of $8,000 if you filed a joint return). If the special rule for long-time residents of the same main home applies, the credit is limited to $3,250 (instead of $6,500 if you filed a joint return).
posted by idyllhands at 8:48 PM on April 26, 2012

It may be pro-rated, though. Worth it to ask an accountant, I think.
posted by amanda at 10:18 PM on April 26, 2012

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