[(former)FormerSanDiegan]

My advice depends on the price of the house and the status of your interest rate lock and rates.

You are essentially risking an unknown change in interest rate for the 10K credit.

If it’s 250K property and you are not locked with your rate yet, then it’s probably worth stalling. If rates move against you during the interim the penalty is about $625 per year per quarter-point increase in rate.

If it’s 850K property and your interest rate is locked, then I probably would not stall. AT that level a quarter-point increase in interest rate is over $2k per year.

[(former)FormerSanDiegan]

My advice depends on the price of the house and the status of your interest rate lock and rates.

You are essentially risking an unknown change in interest rate for the 10K credit.

If it’s 250K property and you are not locked with your rate yet, then it’s probably worth stalling. If rates move against you during the interim the penalty is about $625 per year per quarter-point increase in rate.

If it’s 850K property and your interest rate is locked, then I probably would not stall. AT that level a quarter-point increase in interest rate is over $2k per year.

[(former)FormerSanDiegan]

[quote=itsj0nathan][quote=itsj0nathan]I think you are confused, i was single at the time of purchase and she was single at the time of my purchase, we still live seperately and will do so for three years. Therefore, why would we have to pay either of the credits back as we were both single at the time and we currently still live in the houses we bought. The only change is we are married by law.

Thanks[/quote][/quote]

This is not legal or tax adivce, but here are the facts as I undersdtand them …

1. Both transactions occurred during the 2009 Tax year.

2. You were married in 2009, soYour choices are:
Married, filing jointly
or
married filing separately

3. If you file jointly, both spouses have to qualify. Since the spouse that bought earlier in the year was not a first time homebuyer, the second purchase would not meet the requirements under married filing jointly.

4. If you file separately the maximum credit is $4000.

So, it appears that the most you can get is a total of 8K. However, I would consult legal tax advice on this case to see if there is a loophole.
Otherwise, you could go ahead and claim both credits at the risk of possible audit.

Note that to be audit proof you would also have to convince the IRS that you each live the majority if the time in these separate dwellings.

Good Luck.

[(former)FormerSanDiegan]

[quote=itsj0nathan][quote=itsj0nathan]I think you are confused, i was single at the time of purchase and she was single at the time of my purchase, we still live seperately and will do so for three years. Therefore, why would we have to pay either of the credits back as we were both single at the time and we currently still live in the houses we bought. The only change is we are married by law.

Thanks[/quote][/quote]

This is not legal or tax adivce, but here are the facts as I undersdtand them …

1. Both transactions occurred during the 2009 Tax year.

2. You were married in 2009, soYour choices are:
Married, filing jointly
or
married filing separately

3. If you file jointly, both spouses have to qualify. Since the spouse that bought earlier in the year was not a first time homebuyer, the second purchase would not meet the requirements under married filing jointly.

4. If you file separately the maximum credit is $4000.

So, it appears that the most you can get is a total of 8K. However, I would consult legal tax advice on this case to see if there is a loophole.
Otherwise, you could go ahead and claim both credits at the risk of possible audit.

Note that to be audit proof you would also have to convince the IRS that you each live the majority if the time in these separate dwellings.

Good Luck.

[(former)FormerSanDiegan]

[quote=itsj0nathan][quote=itsj0nathan]I think you are confused, i was single at the time of purchase and she was single at the time of my purchase, we still live seperately and will do so for three years. Therefore, why would we have to pay either of the credits back as we were both single at the time and we currently still live in the houses we bought. The only change is we are married by law.

Thanks[/quote][/quote]

This is not legal or tax adivce, but here are the facts as I undersdtand them …

1. Both transactions occurred during the 2009 Tax year.

2. You were married in 2009, soYour choices are:
Married, filing jointly
or
married filing separately

3. If you file jointly, both spouses have to qualify. Since the spouse that bought earlier in the year was not a first time homebuyer, the second purchase would not meet the requirements under married filing jointly.

4. If you file separately the maximum credit is $4000.

So, it appears that the most you can get is a total of 8K. However, I would consult legal tax advice on this case to see if there is a loophole.
Otherwise, you could go ahead and claim both credits at the risk of possible audit.

Note that to be audit proof you would also have to convince the IRS that you each live the majority if the time in these separate dwellings.

Good Luck.

[(former)FormerSanDiegan]

[quote=itsj0nathan][quote=itsj0nathan]I think you are confused, i was single at the time of purchase and she was single at the time of my purchase, we still live seperately and will do so for three years. Therefore, why would we have to pay either of the credits back as we were both single at the time and we currently still live in the houses we bought. The only change is we are married by law.

Thanks[/quote][/quote]

This is not legal or tax adivce, but here are the facts as I undersdtand them …

1. Both transactions occurred during the 2009 Tax year.

2. You were married in 2009, soYour choices are:
Married, filing jointly
or
married filing separately

3. If you file jointly, both spouses have to qualify. Since the spouse that bought earlier in the year was not a first time homebuyer, the second purchase would not meet the requirements under married filing jointly.

4. If you file separately the maximum credit is $4000.

So, it appears that the most you can get is a total of 8K. However, I would consult legal tax advice on this case to see if there is a loophole.
Otherwise, you could go ahead and claim both credits at the risk of possible audit.

Note that to be audit proof you would also have to convince the IRS that you each live the majority if the time in these separate dwellings.

Good Luck.

[(former)FormerSanDiegan]

[quote=itsj0nathan][quote=itsj0nathan]I think you are confused, i was single at the time of purchase and she was single at the time of my purchase, we still live seperately and will do so for three years. Therefore, why would we have to pay either of the credits back as we were both single at the time and we currently still live in the houses we bought. The only change is we are married by law.

Thanks[/quote][/quote]

This is not legal or tax adivce, but here are the facts as I undersdtand them …

1. Both transactions occurred during the 2009 Tax year.

2. You were married in 2009, soYour choices are:
Married, filing jointly
or
married filing separately

3. If you file jointly, both spouses have to qualify. Since the spouse that bought earlier in the year was not a first time homebuyer, the second purchase would not meet the requirements under married filing jointly.

4. If you file separately the maximum credit is $4000.

So, it appears that the most you can get is a total of 8K. However, I would consult legal tax advice on this case to see if there is a loophole.
Otherwise, you could go ahead and claim both credits at the risk of possible audit.

Note that to be audit proof you would also have to convince the IRS that you each live the majority if the time in these separate dwellings.

Good Luck.

[(former)FormerSanDiegan]

It appears that you qualify for a maximum total of $8K credit. Worst case you could be disqualified from both credits (e.g. if you moved into the second home purchased).

Married filing separately also has other negative consequences. Depending on your income, filing seperately could cost you a significant chunk of the credit you are trying to retain.

Consider the second 8K an interest-free loan from the IRS (assuming you didn’t underpay 2009 taxes).

I commend you for trying to maximize your outcome, but hopefully the two purchases make financial sense for you, regardless of the 8K credit.

[(former)FormerSanDiegan]

It appears that you qualify for a maximum total of $8K credit. Worst case you could be disqualified from both credits (e.g. if you moved into the second home purchased).

Married filing separately also has other negative consequences. Depending on your income, filing seperately could cost you a significant chunk of the credit you are trying to retain.

Consider the second 8K an interest-free loan from the IRS (assuming you didn’t underpay 2009 taxes).

I commend you for trying to maximize your outcome, but hopefully the two purchases make financial sense for you, regardless of the 8K credit.

[(former)FormerSanDiegan]

It appears that you qualify for a maximum total of $8K credit. Worst case you could be disqualified from both credits (e.g. if you moved into the second home purchased).

Married filing separately also has other negative consequences. Depending on your income, filing seperately could cost you a significant chunk of the credit you are trying to retain.

Consider the second 8K an interest-free loan from the IRS (assuming you didn’t underpay 2009 taxes).

I commend you for trying to maximize your outcome, but hopefully the two purchases make financial sense for you, regardless of the 8K credit.

[(former)FormerSanDiegan]

It appears that you qualify for a maximum total of $8K credit. Worst case you could be disqualified from both credits (e.g. if you moved into the second home purchased).

Married filing separately also has other negative consequences. Depending on your income, filing seperately could cost you a significant chunk of the credit you are trying to retain.

Consider the second 8K an interest-free loan from the IRS (assuming you didn’t underpay 2009 taxes).

I commend you for trying to maximize your outcome, but hopefully the two purchases make financial sense for you, regardless of the 8K credit.

[(former)FormerSanDiegan]

It appears that you qualify for a maximum total of $8K credit. Worst case you could be disqualified from both credits (e.g. if you moved into the second home purchased).

Married filing separately also has other negative consequences. Depending on your income, filing seperately could cost you a significant chunk of the credit you are trying to retain.

Consider the second 8K an interest-free loan from the IRS (assuming you didn’t underpay 2009 taxes).

I commend you for trying to maximize your outcome, but hopefully the two purchases make financial sense for you, regardless of the 8K credit.

[(former)FormerSanDiegan]

We’ve always favored smaller houses (for the money) in older neighborhoods, close to work and fun (beach/downtown). When we lived in San Diego we were within 10-15 minutes of everything in the Clairemont, Bay Park and Point Loma areas (at various different times over the years renting and owning). Even with kids we avoided the newer ‘burbs, in favor of post-war ‘burbs.

[(former)FormerSanDiegan]

We’ve always favored smaller houses (for the money) in older neighborhoods, close to work and fun (beach/downtown). When we lived in San Diego we were within 10-15 minutes of everything in the Clairemont, Bay Park and Point Loma areas (at various different times over the years renting and owning). Even with kids we avoided the newer ‘burbs, in favor of post-war ‘burbs.

[(former)FormerSanDiegan]

We’ve always favored smaller houses (for the money) in older neighborhoods, close to work and fun (beach/downtown). When we lived in San Diego we were within 10-15 minutes of everything in the Clairemont, Bay Park and Point Loma areas (at various different times over the years renting and owning). Even with kids we avoided the newer ‘burbs, in favor of post-war ‘burbs.

[Author]

Posts