A couple meets all requirements to qualify for the first time homebuyer credit. The house that was purchased on June 6, 2009 for $70,000 is a two family house with one half being used as their principal residence and the other half is rental property. How is the tax credit figured in a situation such as this??
Thank you, George L. Anthony Anthony's Income Tax Service
$35,000 qualifies as personal residence on which to figure the 10% credit.
And I just bet the real estate agent told them they would get $8,000!
ChEAr$, Harlan Lunsford, EA n LA
Unless a qualified appraisal could place the value of the resident portion at a higher percentage of the value from the rental portion. It's possible, but the default is to go 50/50, or by square footage of it isn't "half" of the building.
Maybe it's better to not rent and take the full 10% credit on 70k. You'll have to crank the numbers to figure out for sure.
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