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Old 04-13-2012, 03:43 PM
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Question First Time Homebuyer Credit, New Home?

Hello,
My wife and I purchased a house in 2009 and took the 1st time homebuyer credit in August. We're moving to a new city and will close on a house there in late May. We plan to keep the first house and convert it to a rental property AFTER 36 months have expired. My question is: will purchasing the new home give us any headaches? Can we still turn on the utilities in our new home, have a substantial amount of our property moved there, etc., as long as we keep our utilities and basic information (i.e. criteria for "Main Home" in the IRS literature) in the current location?

Will we have any trouble if our closing documents on the new house state that it will be the primary residence?

For what it's worth, we're not trying to cheat the system. I just want to be sure about the definition of "primary home". My wife and I will be abroad most of the summer and are thinking of moving before we leave, and are also thinking of asking my sister-in-law to house-sit for us in the new place.

Thanks for any information!



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Old 04-15-2012, 09:18 AM
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“We plan to keep the first house and convert it to a rental property AFTER 36 months have expired. My question is: will purchasing the new home give us any headaches?”---> There are a few exceptions to the repayment requirement. It's waived if you buy a new principal residence within two years.So, this exception is NOT for you as you buy a new home, NOT a main home but a second home, more than two years. The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase ;however, as long as you convert the entire home to a rental or business property after 36 months of the date of purchase, the property is still used as your principal residence, you are not required to repay the credit; you do not need to repay the FTHBC for a home you purchased in 2009 /2010 as long as it remains your main home for the three years after the purchase.
“ Can we still turn on the utilities in our new home, have a substantial amount of our property moved there, etc., as long as we keep our utilities and basic information (i.e. criteria for "Main Home" in the IRS literature) in the current location?”---->As described above, as the purchase of the second home occurred after 36 months(after the purchase of the main home), you are not required to pay back your first home buyer credit back to the IRS.
“Will we have any trouble if our closing documents on the new house state that it will be the primary residence?”---->I don’t think so; you do not have to sell the old home at the time you make your new purchase UNLESS you dispose of the old home within three years after its purchase.I guess you can contact the IRS for more accurate info in detail.



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