had a client come in wanting to amend her '08 return and claim the first-time homebuyer's credit in advance of purchasing her first home.
I told her that this was not allowed; however, her lender faxed over an FHA letter explaining how "advances" on the credit were to be handled. The lender also stated that she was aware of others who had gotten the credit in advance of the purchase.
I called the IRS and the agent I spoke with said yes, it was allowed. However, I have ceased to believe anything I'm told on the phone by the frontline folks there. I told the client that I would have to do further research.
A fellow EA kindly provided me with this reference:
There is a small loophole--if you have "finalized" the purchase you can claim the credit. Perhaps on an FHA loan that is possible before closing? Anyway, our software does not allow a future date to be entered on Form 5405 and now I see why.
The "success" stories are obviously going to breed imitators, along with IRS employees who give out answers like the one I got today.