Angela,
First let me say that you need to ask your tax/legal adviser again to get a clear answer that applies specifically to your situation. But here are some observations.
Angela Meyer:In 2006 my mother added my name to the
title of the home (not sure if this is relevant???).
This is extremely relevant. It sounds like you became a owner of this property in 2006 when your mother deeded you an interest in the property. I am presuming that when you say she added your "name to the title of the home" that is how it was done.
Angela Meyer: In 2007 we assumed the mortgage loan from my mother and
became owners of the home vs. renters.
This is not when you became a homeowner; this was when you became responsible for a loan. You became an owner of the property when your name was "added to the title." (Again I am having to make some presumptions that could be wrong.)
Angela Meyer: It's basically the
question of; does a homeowner qualify because the homeowner LIVED in the same
house for 5 out of 8 years....or, OWNED the home for 5 out of 8 years?
Here are some issues you need to consider:
It appears you purchased (became a homeowner in a property) in 2006 and have lived in it as your primary residence since then.
It appears you have owned and used the property as your primary residence consecutively for about three of the last eight years.
It appears your interest in the property you own came from a close relative.
From the IRS website:
"S8. A qualifying taxpayer bought a home in August 2008 that
needed a lot of work before occupying. They finished the renovations
and moved in the home in January 2009. Can they claim the $8,000, since
they did not occupy the home until 2009?"
"A. No. Taxpayers who purchase an existing home and renovate the
property before moving in are eligible for the first-time homebuyer
credit based on the date of purchase, not the date of occupancy."
"Q. Does previously inheriting a home and living in the inherited
home automatically disqualify an individual as a first-time homebuyer
with respect to a different home that is purchased within the
prescribed 2008 and 2009 time frames?"
"A. Yes, an ownership interest in a prior principal residence would
preclude the taxpayer from being considered a first-time homebuyer. As
long as the taxpayer owned and used the prior home as his principal
residence, then he is not a first-time homebuyer. There is no exception
for taxpayers who did not buy their prior residences. (05/06/09)"
"Q. Who cannot take the credit?"
"A. If any of the following describe you, you cannot take the credit, even if you buy a new home:"
- "You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild."
- "You owned a principal residence at any time during the three years
prior to the date of purchase of your new home. For example, if you
bought a home on July 1, 2008, you cannot take the credit for that home
if you owned, or had an ownership interest in, another principal
residence at any time from July 2, 2005, through July 1, 2008."
From the text of the bill:
‘(6)
EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the
case of an individual (and, if married, such individual’s spouse) who
has owned and used the same residence as such individual’s principal
residence for any 5-consecutive-year period during the 8-year period
ending on the date of the purchase of a subsequent principal residence,
such individual shall be treated as a first-time homebuyer for purposes
of this section with respect to the purchase of such subsequent
residence.’.
I think this last one answers your question: "does a homeowner qualify because the homeowner LIVED in the same
house for 5 out of 8 years....or, OWNED the home for 5 out of 8 years?" It clearly says: "owned and used."