The economic stimulus package, particularly the first-time homebuyer credit, generates lots of questions to our consumer blog, Consuming Interests.
Tax professionals Theresa M. Bandell, director of Stegman & Co. in Baltimore, and Mark Steber, vice president of tax resources at Jackson Hewitt in Sarasota, Fla., provided these answers:
Question: : Does the credit of 30 percent on an energy-related investments - windows, furnaces, insulation - up to a maximum of $1,500 apply to rental houses or only to the house occupied by the owner?
Bandell: : The energy credit is only available on the taxpayer's principal residence.
Question: : Is the first-time homebuyer credit available only if you haven't owned a property inside America in the last three years or is it if you owned a property anywhere in the world?
Steber: : If you did not own a principal residence within the United States during the last three years preceding the purchase of your new home here, you may qualify for credit.
Question: : We are refinancing our mortgage and would like to add our daughter, who would be a first-time homebuyer, to the title. Would she qualify for the $8,000 credit if she met all the other IRS guidelines for qualifying?
Steber: : Your daughter cannot buy a home from you - this includes a refinance where she is added to the loan - and qualify for the first-time homebuyer's credit.
Question: : A friend quitclaim deeded a property in 2007 to me and my husband, and we have been living there. My husband and I now are planning on getting a new property. Will we qualify as first-time homebuyers?
Bandell: : No, you do not qualify for the credit because you have an ownership interest in your personal residence.
Question: : My boyfriend and brother bought a home together in June 2006. Both of their names are on the deed and mortgage. I am not on either. I have just lived with them. I would like to buy the house, and I would be considered a first-time home buyer. However, I read that you cannot buy from a close relative.
Bandell: : You would be fine qualifying for the credit even with your brother on the deed, because "related" person for this purpose only includes spouse, ancestors (parents, grandparents) and lineal descendants. Thus, a purchase that would otherwise qualify for the credit will not be disqualified merely because the property was acquired from a sibling.
