The IRS has finally established guidelines for eligibility for the home buyer credit when there are co-borrowers that purchase a home.
When a parent of an adult child who already owns a home co-signs for the purchase of a new home with their child, and both names appear on the mortgage, the IRS says that the first-time home buyer may qualify for the entire tax credit.
According to the IRS, the parent does not qualify for any portion of the tax credit, but if the adult child has either never owned a home or hasn’t owned a home during the previous three years and can qualify based on income, they can be allocated the entire $8,000 tax credit.
When unmarried homebuyers co-purchase a home together and only one of them is eligible for the credit, then the full $8,000 tax credit may be allocated to the eligible buyer.
As always, please consult a tax professional for advice before filing.
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