Friday, January 22nd, 2010

How does the $7500 tax credit for 1st time home buyers work when joint buyers are not married?

tax credit
Michelle asked:


If I bought my first house jointly with someone else, both be on the mortgage/title, etc- splitting everything 50/50, how would this new $7500 tax credit for first time home owners work? Would you both be able to take the credit ($7500 each for a total of $15,000) if you are first time home owners (and not married)? Or would only one of you be able to take it?

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4 Responses to “How does the $7500 tax credit for 1st time home buyers work when joint buyers are not married?”

golferwhoworks Says:
January 23rd, 2010 at 9:07 am

1 per home. The primary wage earner is the borrower and they would get it on their taxes

taxtools Says:
January 26th, 2010 at 11:58 am

Under the new law, two or more unmarried individuals
may purchase a residence and qualify for the credit. They must allocate the amount of the credit between them as the IRS prescribes. However, the total amount of the credit allowed to the individuals jointly may not exceed $7,500.

TaxRef

taxguy11 Says:
January 26th, 2010 at 10:07 pm

The Form 5405 instructions explain: If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $7,500 or 10% of the purchase price.

Note. A reasonable method is any method that does not
allocate all or a part of the credit to a co-owner who is
not eligible to claim that part of the credit.

Pyro Says:
January 28th, 2010 at 10:52 pm

The Form 5405 instructions explain: If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $7,500 or 10% of the purchase price.

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