First time homebuyer with fiance'...Then get married

When two unrelated persons buy a new home, IRS Guidance says that the first time home buyer credit can be split between the two buyers using any reasonable method. One example provided, is the instance where one buyer qualifies for the credit and the other buyer does not qualify. The buyer who qualifies can take the whole credit. Therefore, your first option is viable.

Eligibility for the credit is based on one's status on the date of purchase. A subsequent marriage to someone who is not eligible does not eliminate the right of the buyer to take the credit on a joint return. Under your second scenario, she would still be able to take the credit on a jointly filed 2010 return as long as the purchase date is before the marriage.

All of the above assumes that all of the other eligibility requirements that were not stated in the OP are fulfilled.

Regarding "Eligibility for the credit is based on one's status on the date of purchase", how does one reflect this on form 5405? Suppose person P1 makes 50k a year, and bough a house on June/1. On July/1 the person marries P2 who makes $10,000,000 a year. They live in a community property state and have no prenup specifying separate income, so MFS is pretty much out of the question.

In the MFJ return, the income is $10,050,000. The 5405 instructions say you can't take the credit if your income is greater than 170k.

In the MFS return, each person's income is at least one million because half of P2's income from July/1 belongs to P1. The 5405 instructions say you can't take the credit if your income is greater than 95k.

Or what about the other case where P1 makes 100k a year and buys a house on June/1. Marries P2 who makes 40k a year on July/1. Net income on joint return is 140k which qualifies for credit. But on P1's MFS return income is 50+50/2+40/2•k (P1's income for first 6 month, half of P1's income for last 6 months, half of P2's income for last 6 months).

The last part of my reply said that the answer assumes that all other eligibility rules are met. The income levels are based on the tax year in which the home was bought. The status as of the purcahse date deals with the fact that on that date the person was single rather than married to a person who was not eligible. A subsequent marriage in the same year does not change her status as of the date of purchase. If her income for the year exceeds the income level to qualify, then she does not qualify.

I should have added that as one has the option to take the credit in tax year 2009 for a 2010 purchase, it would be one's 2009 income that would be used for the income test. Attempt to take the credit in 2010, and I believe that one has to use the income for that tax year.