Answers to first-time homebuyer credit and other stimulus questions
Thanks to Cindy Hockenberry, research coordinator with the National Association of Tax Professionals, for the answers to these questions:
Q. I sold my home in May 2006. I purchased a new home on February 27, 2009. Does this mean I am not eligible for the credit? Is it exactly 3 years to the date?
A. A “first-time homebuyer” is an individual who had no present ownership interest in a principal residence during the three-year period ending on the date of the purchase. This means that you count back three years from the date the home was purchased. Since you had an ownership interest in a principal residence during the three year period from February 2006 to February 2009, you do not qualify for the credit.
Q. I receive SSDI benefits. If I'm entitled to the $250 one-time payment, what about my children?
A. The $250 payment is only available to adults and retirees. If you are collecting Social Security disability payments, you qualify. Your children do not.
Q. My son closed on a house 2/27/09. He is married and neither he or his wife have ever owned a primary residence. The deed and loan are in both of our names. His wife is not on either. I currently own a home and will continue to live in it. Can he claim the $8,000 credit?
A. Yes. He will qualify for the full $8,000 credit. The fact that your name is on the title and mortgage does not matter.
Q. Under new the stimulus package, will persons turning 65 who lose their health and dental plans be able to get help with COBRA for their spouses who are not, yet 65? I am covered under my husband's health and dental plans. He will turn 65 in October 2009. I will not be 65 until November 2010 and will need to find dental and health care coverage. We are way under the $250,000 adjusted gross income.
A. Yes. A spouse or dependent of a terminated employee can independently elect COBRA coverage and can independently receive a subsidy.
Q. I presently own a co-op. Is this considered a "home," thereby disqualifying me from the credit if I purchase a home this year?
A. An ownership interest in co-operative housing is considered a personal residence if you live there as your home. If you sell the co-op and buy another home, you are not eligible for the credit.
Q. I understand that self-employed people will get a stimulus payment, but in what form will that be? I am hearing that people will receive a lowering of their withholding tax. But if we don't have a "paycheck," will we receive a check in the mail or a deduction on the taxes we file or some other means?
A. A self-employed person can claim the credit when they file their 2009 tax return. If they want the benefit in advance, they can reduce their estimated tax payments for the remainder of 2009.
Comments
I bought a house in 2006 and got married in 2007. My husband lived there for 1 1/2 years, but I never added him to the house. In November, 2008, we sold that house a bought a new one? Would he qualify as a first time home buyer if we file together? What if we file seperately?
I'll forward your question to a tax pro. Check back on the blog in a few days. - eileen
Posted by: Rebecca | March 26, 2009 9:34 PM
Thanks for the blog - great posts.
My wife owned a condo that she sold in August 2006. However, she did not live in the condo from August 2004- August 2006. She bought the condo in 2003. Does she still have an ownership interest in a personal residence if she was not actually living there in the past 3 years?
She did elect to use her capital gain exemption for the 2006 sale (which probably saved her $300). Would amending her 2006 return and not using the exemption qualify us for the stimulus credit?
Thank you.
Not sure. She can't have owned a house in the past three years, so if she hasn't had an interest in a house and bought one later this year, she may. When are you buying a house? I'm not sure whether you will qualify for the credit, but will forward this message to a tax pro for an answer. I wait until I get a batch of questions before I send them to a tax expert. I just sent a group yesterday, so I probably won't forward yours until I get a few more questions. But check back on the blog. - eileen
Posted by: Joe Conway | April 30, 2009 12:33 AM
i bought a home in feb/mar 09 and i'm disabled plus the home is being bought as "owner financing". another words i did not go through a bank or mortgage company the person i bought it from financed it for me i paid him a down payment and all monthly payments
this is the 1st home i've ever bought
but the title / deed will stay in his name until paid off but i will have it recorded at the court house for property taxes purposes
could i get the 1st time homebuyer "refund" since i do not file income taxes. if so how do i do it and will i receive a check for the credit / refund
thank you for your time
Your question is being forwarded to a tax expert. Check back on the blog for an answer later. - ema
Posted by: cindy | August 13, 2009 9:15 AM
I want to find out if I am eligible for first time homebuyer tax credit. My husband and I are planning to buy our first house this summer. My husband has never owned a house. I was co-owner with my father for our house in Chicago; however, I have been living with my husband in Detroit in a rental property for the last 3 years and have not used that house as a principal residence. Do I qualify?
Not if you are buying the house in the summer. You must have a house under contract by April 30, and settle by June 30. I called the IRS about the other issue. And IRS' Jim Dupree says as long as that house with your father isn't your principal residence, you would be eligible for the credit. - ema
Posted by: erum | February 23, 2010 9:16 AM
Ema,
Thanks a lot for quick response. We are building the house and will close on June 25. One thing I want to make sure, is that I moved out from my parent's house 3 years ago, will I have to submit any documentation to IRS to prove I do not use Chicago's house as a principal residence within 3 years.
I don't know. You will have to look at the requirements on the tax form. - ema
Posted by: erum | February 23, 2010 11:41 AM