When co-borrowing, who gets the $8,000?
IRS eligibility guidelines for the $8,000 homebuyer tax credit are now refined when it comes to co-borrowers buying a property, according to Realtor.org. Although some are the tax credit’s extension, it’s being hailed by others as a buyer stimulus.
Regardless of where you fall on the spectrum, you should know the basics of how it works. Below are the details according to NAR of how co-borrowers’ situations work out:
- When unmarried individuals co-purchase a home and only one is eligible for the credit, the full $8,000 can be allocated to the eligible buyer.
- When a homeowning parent co-signs for an adult child’s mortgage and both names are on the note, the first time buyer can qualify for the whole amount “under some circumstances.”
- The parent doesn’t qualify for any portion of the first time buyer’s credit, but if the child hasn’t owned a home during the 3 years prior, he or she can be allocated the entire $8,000.
What have you learned about the tax credit that other agents should know? Are there any unique situations you’ve been in that other agents would benefit from learning about? Tell us what you’ve learned in the comments!