Only first-time homebuyers may qualify for the $8,000 tax credit. The definition of first-time homebuyer is a buyer, and in the case of married purchasers a buyer and the buyer's spouse, who have not had an ownership interest in a primary residence in the three years immediately preceding the purchase of the home.
So if a buyer is married when the home is purchased and EITHER the buyer or their spouse has owned a home as their primary residence in the prior three years they are not eligible for the credit. This is true even if the buyer was not married to their spouse when the spouse owned a primary residence or if the spouse is not taking title to the home being purchased.
Interestingly enough a buyer may have owned other property in the three years preceding the purchase, just not property that they have used as their primary residence in the past three years.
As I have pointed out before owing and owning are separate, though related, issues. Being on a note does not determine whether you have an ownership interest in a property. It is possible to owe (be responsible for a loan) on a property in which you do not have an ownership interest and conversely have an ownership interest in a property that is encumbered with a mortgage note that you do not owe. The provisions of the Housing and Economic Recovery Act dealing with the
first-time home buyer tax credit does not use financing in determining eligibility for the tax credit.
Please consult your tax advisor for information on your specific situation. Additionally, see the IRS website. Here is a link to information on the Housing and Economic Recovery Actfirst-time home buyer tax credit that answers questions similar to the one you pose:
http://www.irs.gov/newsroom/article/0,,id=206294,00.html
Answer Submitted on Thu, May 14 2009
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