Don't Get Turned Down For the Tax Credit, Learn How Here

Some people have been turned down for the first time homebuyer IRS tax credit even though they have never owned a home and have just purchased their very first little castle. 

 What?!?  What a shock!

How can that be?! 

After toiling away for months picking out the perfect home, putting offers on short sales, and negotiating a last minute request for repairs with the sellers, now you’ve closed escrow and the IRS says “Sorry Charlie!”

The IRS has been rejecting first-time homebuyer credit from anyone who shows a 1098 Mortgage Interest Expense in their prior year files.  That would make sense, the 1098 form shows that you had mortgage interest that you were deducting when you filed taxes, so you must have owned a home, right?

Not necessarily! 

What about the first-time homebuyers that have had a mobile home?  A timeshare?  A boat?  Other recreational property like a cabin?

Yes, they are being turned down based upon the 1098 form that they have in their files.

Here is what the experts are advising to do if this happens to you:

• Respond immediately to the IRS and let them know why you are still qualified to receive the credit.  Timeshares and boats do not qualify as real property.
• Send the IRS copies of your rental agreement, bill sent to the address you lived at in your name and your driver’s license with the physical address that you lived at your last rental
• If you are rejected after two attempts to explain the problem to the IRS there is a toll free Advocate Service: (877) 777-4778, also contact your Congressman, your Senator, and the Attorney General.
• If you think that there is the possibility that this may happen to you, be proactive, send that information in as soon as you close escrow, they’ve extended the cut off date, take advantage of it!

Closing escrow and moving all your belongings to the new pad is tough enough, so be prepared ahead of time if you think that you might not get your tax credit, after all, your entitled to it!