Already have a Mortgage on Parent’s Home, do I qualify for First Time Home Buyer Tax Credit?
by Mortgage Rates on Monday, September 27th, 2010 | 2 Comments
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As far the house deed on your parents name and belong to them, you are fine. It does not matter if you pay mortgage for one house or not. But, there is a technical issue. The mortgage lender will not issue you the mortgage payment unless you are the main purchaser of your family house. Thus, you are as per the IRS rule have been home owner within the last five years.
Technically you have 2 houses. But, you may be qualify for the second home credit.
In addition, the new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. The IRS has stepped up compliance checks involving the home buyer credit, and it encouraged home buyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:
The following is a comprehensive link about the topic
http://www.irs.gov/instructions/i5405/ch02.html
Check your paperwork very carefully.
I believe that the loan *is* either in your name (making it your second house) or the loan is unsecured (and not deductible and you’d have to amend to fix the returns to remove the deductions).
For the FTHBC you’d have to prove to the IRS that this wasn’t your main home.