buy a home in wife's name to claim the $8000 tax credit

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Submitted by cahunter on February 15, 2009 - 8:36am

I have a question about this $8000 tax credit. Our situations is that both husband and wife are working. And the total income is over the income cap for $8000 tax credit for married couple. But the wife's income is still around the income cap for single.

Can we buy a house under only wife's name and file tax as married separately to claim the $8000 tax credit?

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Here's my understanding: - If
Submitted by Eugene on February 15, 2009 - 1:04pm.

Here's my understanding:

- If you buy a house under both of your names and you file as married separately, both of you would be eligible for $4000 credit each, and both of you would be subject to $75,000 income caps.

- If you buy a house under your wife's name and you file as married separately, your wife would be eligible for $4000 credit, subject to her income cap, and you wouldn't be eligible for anything. That makes you worse off than in the first scenario.

- If you file a joint return, it does not matter whose name is on the deed.

I am not a CPA or a financial advisor, be sure to double check with a licensed professional.

If we buy under both's name,
Submitted by cahunter on February 15, 2009 - 2:50pm.

If we buy under both's name, we will get nothing. If my wife can get something, that is better than nothing.

but how would you file your
Submitted by ocrenter on February 15, 2009 - 4:40pm.

but how would you file your income tax? you would have to file as married filing separately. what is the trade off doing that just to get the $8000?

cahunter wrote:If we buy
Submitted by Eugene on February 15, 2009 - 7:52pm.

cahunter wrote:
If we buy under both's name, we will get nothing. If my wife can get something, that is better than nothing.

Tax code is not concerned with combined AGIs of everyone who buys the property. To get full credit, you have to 1) be a first-time homebuyer (i.e. be on the deed), 2) file a tax return, 3) show income that is less than 150,000 if married filing jointly, 75,000 otherwise.

Are you saying that even if
Submitted by cahunter on February 15, 2009 - 9:13pm.

Are you saying that even if we buy a house under both's names, we can still file tax separately and my wife can get half of the tax credit? That is even better than I expected.

So, If my Fiance and I both
Submitted by rmccutty on March 30, 2009 - 12:42pm.

So, If my Fiance and I both make less than $75,000, are first time home buyers buying a primary residence, can we each collect the $8000 dollar credit?

rmccutty wrote:So, If my
Submitted by Eugene on March 30, 2009 - 12:52pm.

rmccutty wrote:
So, If my Fiance and I both make less than $75,000, are first time home buyers buying a primary residence, can we each collect the $8000 dollar credit?

You can't collect more than $8000 per house.

http://www.irs.gov/pub/irs-pdf/f5405.pdf

Quote:
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 ($8,000 if you purchased your home in 2009) or 10% of the purchase price.

cahunter wrote:If we buy
Submitted by FormerSanDiegan on March 30, 2009 - 1:02pm.

cahunter wrote:
If we buy under both's name, we will get nothing. If my wife can get something, that is better than nothing.

Depending on your income level and deductions it is possible to come out welDeductions become more limited, phase-outs apply at lower income levels, etc.
I would not be surprised if you end up paying back a major chunk of the 4k due to filing separately.

When making your decision to buy, I would ignore the $4k credit. Then when you do your taxes next year figure out whether you can make it work by filing separately. Based on the info above it does not appear to matter how you structure your purchase.