Discussion:$8000 FTHBC and Separated Couples

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Discussion Forum Index --> Advanced Tax Questions --> $8000 FTHBC and Separated Couples
Discussion Forum Index --> Tax Questions --> $8000 FTHBC and Separated Couples

Brumleycom (talk|edits) said:

10 June 2009

My married clients have lived apart in different apartments the last three years. They legally separated in 2008 but not divorced yet. Husband purchased a home in 2008 (his name only). Wife purchased in 2009 (her name only).

Wife want to take the $8000 credit for the 2009 purchase and does not want to file a joint return for 2008 thinking it will jeopardize her ability to do so.

My take is they only qualify for the $7500 credit. Since they were still legally married at the time of the 2009 purchase, the husband’s 2008 purchase would disqualify the wife. It would not make a difference whether they filed jointly or separately in 2008.

It doesn’t seem fair so I would like your opinions if I am correct or not.

Waynecpa (talk\|edits) said:	10 June 2009
They can be considered unmarried (single) if they are legally separated, according to state law, under a decree of divorce or separate maintenance. Is this possible?

Brumleycom (talk\|edits) said:	10 June 2009
They live in NC where separation agreements do not carry the same weight as separate maintenance which carries the weight of divorce in some states.

Ckenefick (talk\|edits) said:	10 June 2009
Brumleycom...I think you're right. Since they are married, husband's 2008 purchase would disqualify the wife under IRC Sec. 36(c)(1). Even if one of them could be treated as "unmarried" under the abandoned spouse rules, I don't think this would matter since my guess is that IRC Sec. 36 does not cross-reference IRC Sec. 7703(b).

Riley2 (talk\|edits) said:	11 June 2009
If they are truly legally separated under a court order, then they are treated as single individuals for tax purposes. Sounds like they have a separation agreement, not a decree of separation.