Date of Home Purchase/Form 5405 Questions (documentation, settlement, lawyer, escrow)

[Rysiir]

Having bought a home this year, I'm looking forward to taking advantage of the First Time Homebuyers Tax Credit this tax season. While doing my form 5405, I ran into what may seem like a silly question and I'm hoping some of you familiar with the Real Estate biz can help.

I'm trying to figure out the correct date of purchase. Seems simple, I know, however I find myself questioning it. I was out of state during the close of escrow, so I have a fully executed estimated HUD-1 with a settlement date of 07/07/09 and a copy of the Final HUD-1 with a settlement/funding date of 07/16/09. Now, the closing didn't record with Clark County until 07/17/09. So what is the proper "Date of Purchase" to put on my Form 5405?

Also, the 5405 requires a Settlement statement with all parties signatures. I guess this means sending the HUD-1 that has them, but is just an estimate since the Final HUD-1 doesn't have any signatures. The tricky part is the IRS is also requiring the settlement statement show the closing date, so do you all think attaching BOTH HUD-1's is prudent?

I'm a newbie to all of this, and figured there were some real estate/tax guru's out there that might be able to help!

[forestgump99]

The closing, or recording date, of escrow is the date upon which the Grant Deed conveying title, and Trust Deed showing a lien, and any other recordable documents are actually filed and recorded with the County Recorder's Office. It is the official closing date of escrow.

[brucevi]

The reply from forestgump99 is WONDERFUL news to me because we had our closing in the lawyer's office on December 24, 2008 but the documents were not filed and recorded until January 5, 2009. What I would dearly love is some citation or verification from an IRS site or something that I can rely on for forestgump99's reply. Could anyone please provide that??

THANK YOU!

[olecapt]

Originally Posted by brucevi

The reply from forestgump99 is WONDERFUL news to me because we had our closing in the lawyer's office on December 24, 2008 but the documents were not filed and recorded until January 5, 2009. What I would dearly love is some citation or verification from an IRS site or something that I can rely on for forestgump99's reply. Could anyone please provide that??

THANK YOU!

Are you in Nevada? If not I would not count on that definition.

If in Nevada I can see no way the IRS would pick up any other date.

[MadManofBethesda]

Originally Posted by Rysiir

Also, the 5405 requires a Settlement statement with all parties signatures. I guess this means sending the HUD-1 that has them, but is just an estimate since the Final HUD-1 doesn't have any signatures. The tricky part is the IRS is also requiring the settlement statement show the closing date, so do you all think attaching BOTH HUD-1's is prudent?

I'm a newbie to all of this, and figured there were some real estate/tax guru's out there that might be able to help!

The settlement statement does not necessarily need to be signed by all parties, or even be a HUD-1. It depends on what is considered valid in your local jurisdiction. For example, although I received a "settlement statement," I didn't receive a HUD-1 because I paid cash for my house. Here is the qualifying language from the IRS Form 5405 instructions:

Information regarding the 2009 Form 5405,
First-Time Homebuyer Credit and Repayment of the Credit

Note Regarding Settlement Statement: While the Form 5405 instructions indicate that
a properly executed settlement statement should show the signatures of all parties, the
IRS recognizes that the elements of the settlement document, often a Form HUD-1, may
vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and
seller. The settlement statement that must be attached to the return is considered to be
properly executed if it is complete and valid according to local law. In locations where
signatures are not required, the IRS encourages the buyer to sign the settlement statement
prior to attaching it to the tax return even in cases where the settlement form does not[/LEFT]
include a signature line.

[rjrcm]

You could try submitting a copy of the Deed of Trust showing the recording date. I suggest you consult with a tax professional or the IRS to find out if this will be sufficient to determine the purchase date.

[kghan]

I called the IRS and they said they were not a real estate expert so they did not know what the date of purchase was. My realtor tells me it is the date the contract was generate, for me 09/02/09 but only last week was my offer excepted and I won't close until March 25. But the realtor says I will not qualify because the date of purchase is 09/02/09. Anybody know the answer for sure?

[rjrcm]

Originally Posted by kghan

I called the IRS and they said they were not a real estate expert so they did not know what the date of purchase was. My realtor tells me it is the date the contract was generate, for me 09/02/09 but only last week was my offer excepted and I won't close until March 25. But the realtor says I will not qualify because the date of purchase is 09/02/09. Anybody know the answer for sure?

The purchase documentation normally given to the IRS for the credit is the HUD-1 closing statement. So your closing date (in your case, 3/25) would be the "date of purchase". It is definitely NOT the date the contract was generated/signed. You also have until April 30th to go under contract, and another 60 days to close and still get the credit.

[nsumner]

In Texas the date of funding is the date considered the date the deed is conveyed. The recording date can take place weeks after this. Many counties have the ability of doing it online so the title companies are getting used to recording the deeds within 48 hours of closing.

Naima

[teresa1961]

We closed on our house on October 25, 2004 and it has been our primary residence the entire time, do we qualify to take any of the credit on form 5405?