Q: I cannot seem to find the answer to my exact situation and was hoping you may be able to help me out. I recently entered into a contract to buy a condo with my girlfriend and we’re going to be closing in February or March.
She is divorced and owned a house less than three years ago so she is not eligible for the first-time buyer tax credit. I am a first-time buyer. How much of the credit am I entitled to take? Thank you for your help.
A: If you’re not married, and you qualify based on the price of the home and how much you earn, you should be able to get at least $4,000, and maybe more.
Your girlfriend probably does not qualify for the new expanded home buyer tax credit unless she lived in her prior primary residence for five concurrent years out of the past eight years.
You might also ask a tax preparer if you can qualify for the entire $8,000 tax credit if she doesn’t qualify for the tax credit (which would be good for you and not so good for her). The IRS has set certain guidelines for two home buyers that are not married to allocate the home buyer tax credit among them.
Still, if your girlfriend does not qualify for the tax credit, it may be possible for you to allocate the entire tax credit on your income tax return.
The rules in this area are still developing and changing, so it’s hard to say for certain whether you could obtain the benefit of the full tax credit with your girlfriend on the title to the home. You may wish to discuss the issue with your tax preparer.
If you get married before you close, you might then both fail the requirements of the tax credit and won’t be entitled to any of the home buyer tax credit. Please go to IRS.gov and search for “home buyer tax credit” in order to get the latest information.
One final thought: if you’re not going to get married before you close on your new property, you should discuss your situation with a real estate attorney and ask him or her to draft up a partnership agreement that spells out where the money is coming from to purchase the property, who is responsible for what and what happens to the property if the two of you end your relationship.