First-time home buyer tax credit question

Liquid Hellz

I purchased a home which will allow me to be eligible for the First-time home buyer tax credit BUT I did it with a co-signer who I am not married to and he would like some of this money as well. Does anyone know how this would work out?

Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.

Thats in the FAQ, number 9. Would I get 7,500 or 3,750? He will be applying for it as well.

Heres the website

http://www.federalhousingtaxcredit.com/faq.php

Djeet

I'd take a look at the documentation involved in the transaction, because the way it reads to me from the information provided only you (the buyer) would qualify for the credit. If you'd like to split the proceeds with a co-signer to the mortgage note, gift it to him.

Does this guy own the house, or was he just a co-signer? Please do look into it, because when we bought a house we sure as shit didn't get no $7500 tax credit.

Daenris

The $7500 tax credit (really a 0% interest loan) is something recent that only applies to home purchases between April? 2008 and June 2009, so if you bought your house during this time Djeet, you may be eligible for it.

I would guess that a co-signer would not be eligible. A co-signer is really just a credit backer for helping you qualify for the mortgage, and giving the bank somewhere to go if you can't pay, they aren't buying the house so shouldn't qualify for any purchasing credits.

However, obviously you should ask a tax professional this. If your cosigner is planning on applying for this he definitely needs to talk to a tax professional, because I don't think he's eligible. You will be eligible and (as long as house purchase price and income limits are appropriate) will be able to claim the whole 7500, which you can do with as you please if you want to give him some. Make sure you're aware though that this is not actually a tax credit even though it's called that. It is a 0% interest loan that must be paid back to the government over 15 years -- I believe starting 2 years after you claim it. Once it's due, it should be included on your tax liability, so you will owe an extra $500/year for 15 years.

Liquid Hellz

As I understood it we are both co-signers to the loan. I was initially on it first but after the checks the bank went through to approve us I believe he got bumped up over me. We both live in it together.

Djeet if you bought your house after April 9, 2008 then you should be eligible for it, you just claim it on your tax return this year.

Yes I realize its 0% interest and even while I don't need the money I can earn interest off of it by putting it into a cd.

The last problem is, if I do claim it and give him half it could become difficult to call him every year for 15 years and ask for 250$.

Daenris

Well, maybe my terminology is wrong, but if you're both buying the house and living in it, and are both on the mortgage, I don't think that's the "classical" co-signer. Typically in my house/mortgage reading a co-signer is a person who is simply adding their credit rating to the mortgage to enable you to get a larger/better mortgage. In this case, you're more like co-owners of the house, in which case I think you should both be eligible to claim the credit. Again though, you should actually speak to a tax professional about this to determine for sure how you should apply for it.

akashfool01

First Time Buyer Mortgages


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Thundyrkatz

Just a clarification about the credit is a 0% loan that needs to be paid back.

Credits claimed in 2008 are loans that need to be paid back over 15 years, Credits claimed in 2009 are not obligated to be paid back..

From IRS.Gov

Q. How does the first-time homebuyer credit differ for homes purchased in 2009 and 2010 compared to the credit for homes purchased in 2008?

A. First-time homebuyers who purchased new homes in 2008, subject to certain criteria, were eligible for a maximum credit of $7,500, which must be repaid over a 15-year period.

Eligibility for the credit and the amount of the available credit for new homes purchased in 2009 were subject to a variety of changing rules depending upon when the home was purchased. First-time homebuyers who purchased new homes in 2009, subject to certain criteria, were eligible for a maximum credit of $8,000, which does not have to be repaid. Long-time residents who purchased homes after November 6, 2009, subject to certain criteria, were eligible for a maximum credit of $6,500, which does not have to be repaid. First-time homebuyers and long-time residents who purchase new homes in 2010 before May 1, 2010, subject to certain criteria, are eligible for a maximum credit of $8,000 or $6,500, respectively, which does not have to be repaid.

The credit for home purchases made in 2008 should be claimed on 2008 tax returns. The credit for purchases made in 2009 can be claimed on either the 2008 or 2009 tax return. The credit for homes purchased in 2010 can be claimed on either the 2009 or 2010 tax return. (1/27/10)