I have a first time home buyer who wants to purchase his Grandfather's Investment Property.  Is there any drawback for a non-arms length transaction with the tax credit? 

Thanks

Hi Dave,

Buying property from a Grandparent would exclude him from the tax credit.  The IRS form 5405, line 8a states a lineal descendant (children, grandchildren, etc.) is not eligible unfortunately.

He can't take the credit if he buys from his grandfather.

IRS Form 5405 says that a claim cannot be filed if they acquired the property from a related person which includes spouse, ancestors (parents, grandparents, etc.) or lineal descendants (children, grandchildren, etc.)