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First-time home buyer credit and definition of "occupy" for new construction

Hello,

My girlfriend and I are buying a house and want to take advantage of the first-time homebuyer tax credit (soon to be $8,000 -yay). This will be my second home so I do not qualify for this credit. However, my girlfriend sold her house in April, 2006. This is a new home construction for which we will close at the end of this month.

Normally, I think this would make her ineligible to take the credit since the time between home ownerships is not quite three years. However, the regulations also say "For a home that you construct, the purchase date is the first date you occupy the home." The home we are building is indeed a newly constructed home, that we put a contract on before construction, but will not close until the home receives its certificate of occupancy, in a few weeks.

An additional fact (if relevent) is that she moved out of the house several months before and relocated to a different state (and lived in an apartment).

My question is this: can she delay "occupation" until after April of this year to qualify for the 3-year waiting period and make her eligible for the tax credit?

Thanks,

Reply to
Chu
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Extremely relevant. The three year clock started ticking when she moved out of her old principal residence. Even though she retained ownership of the property, she no longer had an ownership interest in her principal residence.

Reply to
Phil Marti

Her 3 year clock started ticking on the day she moved out of her main home that she owned and relocated to an apartment. The clock stops ticking on the day she occupies her new main home that she owns.

Reply to
Alan

Thanks for this and the other great answer. A follow-up:

Can we get married in 2009 (after the home purchase) and still take advantage of the credit? Or do we need to wait until 2010?

Cheers,

Reply to
Chu

There was a country music singer who said he'd never get married again. He'd just save pain, aggravation, and legal costs by finding a woman who was angry with him and give her his house.

Getting married to save on taxes is not a unique idea. But is it a good reason to get merried. As always it depends on your personal (non-financial) facts and circumstances. As a legal precaution, see an attorney to draw up a pre-nuptial agreement.

Dick

Reply to
Dick Adams

Only one spouse meeting the 3-year rule isn't a problem. Do check on any income-related phaseouts of the credit. I don't remember off the top of my head whether there are any or not. (Before or after the settlement is irrelevant.)

Reply to
Phil Marti

We're all just going to have to wait and see how the bill is written. All we have so far are bits and pieces of it, as interpreted sometimes incorrectly by the press. And the president will not even be signing it until two days from now.

And btw, there are income phaseouts.

ChEAr$, Harlan Lunsford, EA n LA

Reply to
Harlan Lunsford

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