It seems that questions keep arising as fast as old questions were answered about the new home owner tax credit bill that was passed November 6, 2009.  While we still do not have any definitive guidelines from the IRS, attorneys, realtors, CPA's are all working to interpret how the law was written, so here are some updates to some new questions that have been asked.

1.  If you currently own a home, it appears that you will be able to keep that home as a rental, but you do have to vacate the existing home, and CLOSE on the purchase of the existing home prior to July 1, 2010.  You must have a signed purchase agreement for the purchase by May 1, 2010. 

NOTE:  It is possible that the IRS will require some type of proof of occupancy of the new home in order to qualify you for the tax credit.

2.  If you sign a purchase contract in 2009, but do not close until 2010, you can claim the credit for either 2009, with an amended tax return for 2009, or in 2010.  Please be sure to work with a CPA to make sure that the paperwork is filed correctly so you do not lose the credit.

3.  If you are a partial owner with someone else on another home that you are keeping, such as a time share, or as a co-signer for another loan, you will probably be able to qualify for part of the $6500.  The IRS will be making  a final determination on how much partial you qualify for. 

4.  If you have recently filed for a divorce, and the partner giving up title to the property wants to purchase another home, it seems the divorce must be final in order for the partner who quit claims off the house to qualify for the credit on the new home.  The reason the divorce must be final is because all agreed upon terms of the divorce must be signed off by the courts - or could change prior to the the divorce finalization. 

However, the good news is that the partner who has left the family home does qualify for the tax credit, assuming all the other conditions to qualify are met.

5.  For non-married co-buyers of a home, the please see IRS Notice 2009-12  for examples on how non-married joint buyers may allocate the credit for the first-time or existing home-buyer tax credit program.  Keep in mind that under no circumstances can the amount of the total credit claimed exceed $8000 for first time home buyers or $6500 for existing home buyers. 

6.  Remember that to file for the tax credit, you must file IRS Form 5405.  The current 2008 form 5405 is good only for homes that were purchased and closed on or before November 7, 2009, and for those who wish to claim the tax credit for the 2008 tax year.  The IRS is in the process of revising that form for house purchases closed after November 7, 2009.

For more information, please see:

Details of home owner tax credit for existing home owners