A husband and wife own a home together since 1991. Mortgage interest and real estate taxes where paid on this property in 2010. The wife bought a second home in her name in April 2010. She started living there in July 2010. Mortgage interest and real estate taxes where paid on her property in 2010. Can this husband and wife file a joint return? If yes can they claim the mortgage interest and real estate taxes paid on both properties?

They are not formally separated or divorced. They have 2 dependent children less than 17 years old. The husband salary was ~95K and the wife salary was ~85K.

“She started living there in July 2010. Can this husband and wife file a joint return?”--->In general yes; however, it depends. If they are married or considered married, their filing Status can only be Married Filing Jointly or Married Filing Separately unless the husband( or wife) did not live with his( her) spouse for last 6 months and meet certain conditions. If they are considered unmarried on the last day of the year, then either of them can file his or her return as head of household, HOH, as long he/she meets the criteria to file as HOH.He/she is considered unmarried for tax purposes if on the last of the year he/ she married but lived apart from his/her spouse for at least the last six months of the year. However, in this case, as she lived apart from her spouse for less than six months, she can’t qualify as a HOH filer. So, she should file her return as either MFJ or MFS with her spouse.
“ If yes can they claim the mortgage interest and real estate taxes paid on both properties?”---->As said above, they need to file their return as either MFJ or MFS. So, they can deduct their r/e taxes and mortgage interest expenses as long as they itemize deductions on their 1040 Sch A.
Asyou can see, by filing a joint tax return, both spouses report all their income, deductions, and credits. Both spouses must sign the return, and both spouses accept full responsibility for the accuracy and completeness of the information reported on the tax return.
The IRS cautions, "Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return.

In the scenario described in the original question if the husband and wife file a joint return can they take the $6500 homebuyer credit?

” if the husband and wife file a joint return can they take the $6500 homebuyer credit?”----> Yes you can; as long as you had to enter into a binding contract before on or before April 30, 2010 and close the sale on or before September 30, 2010.Since you own a home together since 1991( you must have lived in the same residence for five consecutive years out of the eight-year period prior to purchase of a replacement home.)You passed the five year mark last 1996, so you qualify for the $6,500 credit and can claim the full amount, whether you buy the new home alone or as a joint owner with your wife or husband.