The Federal Tax Credits Blog

Archive for the ‘IRS Credit’ Category

Question: Can I get the tax credit if I purchase my home from my grandmother?

We have lived there the past 5 yrs and always agreed to buy the home. Is there some way to get the new tax credit? I know the IRS says if you buy it from a family member you are disqualified (I guess to weed out the ones who sell them just for the credit) but our’s is legit.

Answer: Purchasing property from relatives is not eligible for the tax credit.

What make yours more legit than others that have the same goal. The IRS did not want to figure out which transfers were legit or not and have the determination made by them. They would have to set up ground rules, that could not be evenly applied to each family transfer of property.

There fore it was deemed that all property transferred between families would not be a qualifying situation for the tax credit.

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

Tax credit boosts income, spending

The Earned Income Tax Credit provides a lift to working families who struggle to make ends meet, especially during this downturn.

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Recovery: First-Time Homebuyer Credit

Tax Test: Filing your taxes for less than $20

CLEVELAND – We looked at 40 online tax programs, and read all the fine print in search of tax software that will help you file your federal and state taxes for less than $20.

Question: Will I receive the $8000 tax credit if I buy a house in another state?

I currently reside in CA, but wanted to buy a house in AZ, claiming residence there, but renting a room here until finishing college.

What criteria does the IRS use to determine residence? Do you have to move in right after closing, or can the house sit for a few months?

Would I have to claim the AZ address on my 2010 tax returns?

Answer: It is a federal credit that can be used in any state.

IRS changes its rules for people owing back taxes

The Internal Revenue Service announced Thursday that it’s going easier on people who haven’t paid their federal taxes. IRS Commissioner Doug Shulman said the service is making five changes to its lien system and…

Tax Tips & Advice : How to Deduct Home Mortgage Loan Interest

Question: whats the penalty if you wrongly claim the homebuyer tax credit?

My current home ownership is a long story so I wont go into the details. However I feel I fall into the catefory that can claim the 6500 dollar tax credit for buying a new home. But I was wondering what the penalty would be if I claimed it and the IRS came back and said I didnt qualify for it. Would it be just repaying the credit.

Answer: I just went through hell to get it for my 2008 tax return. Yes, 2008, and I just got it today! Trust me, they’re not going to give you a dime until you jump through a bunch of hoops and prove beyond a shadow of a doubt that you’re entitled to it. I say go for it. If you don’t qualify, they’ll let you know. The main thing you’ll need is a copy of your HUD closing contract.

Inside Windham – 3/18

At a recent town council meeting, a good deal of discussion was held among councilors about how someone whose monthly income was Social Security and part-time work, could pay their property tax. To me, this was a hopeful sign that leadership is realizing that for a good-sized segment of our local population, day to day living is a struggle. The job market in Windham doesn’t seem to be booming …

Question: How does the IRS prove related parties for First Time Home Tax Credit?

Just wondering ….
I know Form 5405 asks the the question but how can they verify? And will they verify? Thinking about mother and daugher with different last names. Will the HUD – 1 or Deed indicate relationship? Thanks

Answer: The forms do not indicate relationship.

However….

1) Was the daughter ever claimed by the mother on the mother’s tax return years ago? If so, that would indicate a lineal relationship.

2) When you sign a tax return, you are signing under penalties of perjury. Claiming the $8000 credit when you are not entitled is considered fraud and there is no statute of limitations on fraud. I would hate to see what $8000 plus penalties and interest look like after 6 or 7 years. There could also me criminal penalties, if convicted.

Certain conditions require repaying $8,000 tax credit

Q: I’ve lived in Philadelphia for most of my life. When I bought a house there in 2009, I received the $8,000 first-time homebuyer tax credit. The IRS website says you have to pay it back in “certain circumstances.”

$6500 Tax Credit – Qualifying