Jim Dupree of the IRS answers readers' questions on the first-time homebuyer credit: 

 Q. Do you have to repay the $8,000 first-time homebuyer credit if it does not remain as your primary residence for 3 years? (Example, primary residence for 2 years and then used as rental property)?

A. If, within 36 months of the date of purchase, the property is no longer used as your principal residence; you are required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be your principal residence is due. The full amount of the credit is reflected as additional tax on that year’s tax return. IRS Form 5405, "First Time Homebuyer Credit, "and its instructions will be revised for tax year 2009 to include information about repayment of the credit.

Q. I was separated 3 years ago and signed house over to husband. Can I qualify as a first-time home buyer?

A. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer’s spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. If your spouse has not owned a main home in the last three years, then you may claim the credit.

Q. My fiance and I have purchased a home. Both of us are on the loan and deed. I owned a home two years ago, but he never has. Would he qualify for the $8,000?

A. Eligibility for the first-time homebuyer credit is determined on the date of purchase. If your fiancé, a first-time homebuyer, buys a house and then later that year marries you, not a first-time homebuyer, the credit is allowable to him. Your fiancé may take the maximum credit.

Q. I have never owned a home and am looking to buy in 2009. My husband was separated from his ex-wife in 2002 and left their principal residence at that time. However, their divorce was not final and his name taken off of their house until 2007. Do we quality for the tax credit?

A. No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since your husband had ownership interest in a principal residence within the prior three years, neither of you may take the first-time homebuyer credit. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer’s spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. You would not be able to take the credit even if you filed on a separate return.

Q. My dad quit claimed his home to me and my mom in August of 2005. In August of 2006, I quit claimed the home to my mom because I got married. My husband and I just purchased a home in May 2009. My husband is a first-time home buyer but I’m not clear if I am. Would we qualify for the $8,000 credit?

A. No you won’t. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer’s spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase.

Q. I have owned a house for 15 years. I am about to co-sign for my daughter to buy her first home. I guess she would qualify for the first home buyer’s credit. But when I am filing the 2009 taxes for myself, how do I report the new house to the IRS. Or should my daughter only report it?

A. Since you are not a first-time homebuyer, you cannot claim any portion of the credit, but your daughter may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as her primary residence.

UPDATE: Got more questions about the $8,000 first-time homebuyer credit? E-mail them to Eileen.ambrose@baltsun.com before Tuesday, Sept. 8, 2009 and then tune in at noon on Sept. 8 for her live chat with IRS spokesman Jim Dupree to get the answers.