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Homestead? No. It's just a small home in the central city. I deducted the property taxes and that's all. I don't even charge rent. I just pay the mortgage and let my father live there.
Homestead? No. It's just a small home in the central city. I deducted the property taxes and that's all. I don't even charge rent. I just pay the mortgage and let my father live there.
Many areas allow a homestead exemption for a taxpayer's primary residence. This results in lower property taxes for that home. The question was whether this house that you own is listed as your primary residence meaning that you have been receiving this exemption and therefore paying a lower property tax than if it was a vacation or investment property. If you have been claiming it and paying a lower tax rate as a result, you may now find yourself in a bind by trying to prove that you don't live there to the IRS while claiming that you do live there to the local property tax authority.
Many areas allow a homestead exemption for a taxpayer's primary residence. This results in lower property taxes for that home. The question was whether this house that you own is listed as your primary residence meaning that you have been receiving this exemption and therefore paying a lower property tax than if it was a vacation or investment property. If you have been claiming it and paying a lower tax rate as a result, you may now find yourself in a bind by trying to prove that you don't live there to the IRS while claiming that you do live there to the local property tax authority.
In NC, in addition to other requirements, the owner must be at least 65 in order to be eligible for a homestead exemption, and that owner MUST live in that home.
As I stated in the first post, this home has never been listed as my principal residence. I've never received mail there. I've never lived there. I purchased the home 3 years ago, but my father has been the sole resident for more than 5 years. This is why my initial reaction to the letter from the IRS was that they may have gotten us confused because we have the same name.
"Q. Can I apply for the credit if I bought a vacation home or rental property? A. No. Vacation homes and rental property do not qualify for this credit."
So reading your original post, you owned two vacant lots and your father's home (which he lives in but not you). Technically it's either considered a second home or rental property (that you don't charge for).
Maybe that's why they disqualified you. Cause I think they are saying almost anyone with a second home (or vacation home) would say they are renting their primary residence, and thus eligible for the first time homebuyer's tax credit (as long as it's been 3 years since they had owned a principal residence).
Here is the definition of first-time home buyer, according to the federal gov't: What is the definition of a first-time home buyer? The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, IRS Notice 2009-12 allows unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
Unfortunately, the IRS has not adopted a definition for "principal residence".
Before purchasing my current home, I rented apartments in the various cities where I worked. I rented from 1999 until 2009, when I bought the house where I now live.
I bought the other home in 2007 and have never lived there, nor have I ever listed it as my address.
If you haven't already done so, it may help your case to submit proof of rental payments during this time.
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1st Time Homebuyer's $8K Tax Credit
