IRS makes it official
When we reported last week that the IRS had decided that spouses don't qualify for the $6,500 tax credit for repeat buyers unless both meet the length-of-ownership test, some of you thought we were pulling your leg. Especially because word hadn't filtered down to the folks answering the IRS's phones.
Gust wrote on Dec. 10, "Just called IRS. Was told that there had not been a ruling on this and a ruling should be made within a few weeks."
Nikole wrote three days later, "I spent a great deal of time on the IRS website to verify the info on this blog as well as the article in the Baltimore Sun. When I could not find the info I called the IRS, the gentleman I spoke to said that the IRS had not weighed in on this matter and should have a decision within a few weeks. He also said he did not know what source the Baltimore Sun had gotten their information from."
Er -- the IRS. But said agency has since answered various versions of the "do I qualify" question on its website, which should clear up any lingering doubt about whether personal finance columnist Eileen Ambrose and I were staging an elaborate prank.
Similar versions of those IRS answers were, if you recall, posted by Eileen on the Consuming interests blog last week.
The IRS also addressed the question of what to do when one part of an unmarried couple qualifies for the $8,000 first-time buyer credit and the other qualifies for the $6,500 credit (which, though it's about repeat purchases, is technically part of the first-time home buyer credit):
Q. How does the allocation provision work when unmarried taxpayers purchase a home together and both qualify for the first-time homebuyer credit under different tests?A. Co-purchasers who are not married may allocate the credit using a reasonable method. A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit. The maximum credit for a taxpayer who qualifies under the long-time resident test is $6,500, and the maximum credit for a taxpayer who qualifies under the first-time homebuyer test is $8,000. One example of a reasonable method is to allocate $6,500 to the long-time resident homebuyer and $1,500 to the first-time homebuyer.
Categories: First-time buyer tax credit, Repeat buyer tax credit
