Discussion:First time homebuyer credit-Divorce issue

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{{ForumReplyPost|UserID=Solomon|Date=9 September 2009|Text=May be attorney is interpreting '''and if married''' to mean at the date of purchase subsequent to the divorce. That is to say, if it said '''and if/was married''' within the last three years, then attorney would not take his present position.}} {{ForumReplyPost|UserID=Solomon|Date=9 September 2009|Text=May be attorney is interpreting '''and if married''' to mean at the date of purchase subsequent to the divorce. That is to say, if it said '''and if/was married''' within the last three years, then attorney would not take his present position.}}
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 +{{ForumReplyPost|UserID=Tiredoftaxes|Date=9 September 2009|Text=Is there any separate guidance? Is the attorneys stance legitimate? I really do appreciate your help.}}

Revision as of 23:52, 9 September 2009

Discussion Forum Index --> Basic Tax Questions --> First time homebuyer credit-Divorce issue
Discussion Forum Index --> Tax Questions --> First time homebuyer credit-Divorce issue

Tiredoftaxes (talk|edits) said:

9 September 2009
I have a client who finalized her divorce in 12/08. She was married since 2004. They bought a house after they were married in 2004, but the husband only had his name on the legal papers and mortgage. The client bought a home in 1/09 solely in her name. So as of the date of purchase(1/09), she was single. She is stating that her lawyer told her that she qualified for the credit. After researching the topic, I am not sure. Does being previously married and the husband owning the house solely imply that she had ownership interest in the house? She did not receive the house in the settlement, nor any of the tax deductions relating to it. She didn't technically own a personal residence prior to the divorce, but her husband did. Or does the date of purchase, since it is subsequent to the divorce, mean that she does not have any ownership interest in the old house? I would appreciate any help in this matter.

Solomon (talk|edits) said:

9 September 2009
"36(c)(1) FIRST-TIME HOMEBUYER. --

The term "first-time homebuyer" means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies."

But she was married to someone that had ownership within the last three years.

Tiredoftaxes (talk|edits) said:

9 September 2009
So to her point that she is not married when she bought the house, it makes no difference. Since she had a spouse within the last three years that owned a house, she is considered to have owned it also. Why would the attorney have said that?

Solomon (talk|edits) said:

9 September 2009
"Why would the attorney have said that? "

Believe the Code - not the attorney. Perhaps you might enlighten him/her.

R2 (talk|edits) said:

9 September 2009
The attorney is basing his opinion on IRC Sec. 36. However, I believe that IRS is not really following the statute on this issue. IRS has made an informal announcement that a married person is considered to have an interest in a home if his spouse had an interest in the home. Clearly, this makes sense in a community property state, but otherwise, it only makes sense if the property was "marital property".

Tiredoftaxes (talk|edits) said:

9 September 2009
It is in the state of Arkansas which is not a community property state. So where does that leave me? Go with my gut to not allow it or keep looking? I have looked at IRC Sec. 36, is there anywhere else I can look?

Solomon (talk|edits) said:

9 September 2009
May be attorney is interpreting and if married to mean at the date of purchase subsequent to the divorce. That is to say, if it said and if/was married within the last three years, then attorney would not take his present position.

Tiredoftaxes (talk|edits) said:

9 September 2009
Is there any separate guidance? Is the attorneys stance legitimate? I really do appreciate your help.
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