It’s Friday, so it’s time for this week’s reader-submitted Q & A. (Two covered this week – I am so motivated!) If you’d like to submit a question, click here for more information or simply email a question.
I purchased a mobile home over 17 years ago for cash and have been paying rent for a space in a trailer park. Am I considered a home-buyer so am ineligible for the tax incentive? I am in the process of buying a condo along with a non-relative and she is not eligible for the it.
- Phyllis
Straightforward Answer: Probably not.
More Detailed Explanation
As I wrote recently on my post First Time Home Buyer Tax Credit – 2009 Version (a post with over 500 comments on it):
For anyone who owns a trailer home, mobile home, or lives in an RV and has been asking or wondering about if they’ll qualify for the first time home buyer tax credit if they purchase a home that is permanently fixed to the land: I just found this link at the IRS web site which seems to suggest that those currently living in RVs will qualify (and presumably, as I have suggested, those living in mobile homes and trailer homes without motors will not.)
Here is the relevant Q & A excerpted:
Q. Can an individual who has lived in an RV qualify for the credit?
A. For purposes of the first-time homebuyer credit, an RV with a built-in motor is personal property that is not affixed to land and does not qualify as a principal residence. Accordingly, someone who has owned and lived in an RV within the past three years may still qualify as a first-time homebuyer.
If we have a purchase agreement signed but we don’t end up closing on the house until after Dec.1,2009 will we still be able to collect the $8,000.00?
- Chenoa B.
Straightforward Answer: Nope.
More Detailed Explanation
You must close before 12/1/09. (Unless Congress extends the deadline. While I personally believe some form of the credit for the period starting 12/1 will be passed, there can be no assurance and no vote is on the horizon).
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I’ve heard that a paying tenant living in your primary home is okay if you want to collect the tax credit if it’s your first home and primary residence – but I can hardly get a hold of someone from the IRS to confirm that.
Any recommendations on confirming that? I’m doing some home improvement budgeting and that tax credit is a major factor.
All this is a bit new and confusing to me because I don’t know if having a paying tenant (thus using my house as a business?) overrides it’s use as a my primary residence.
Thanks,
Stacy
@Stacy; You can have a tenant and still qualify for the first time home buyer tax credit, provided you own and live in the home too (and meet the other criteria such as the income and previous homeownership restrictions).