First Time Home Buyer Credit Denied

**samik73** · 11-14-2010, 04:40 AM

Hello,

Thanks in advance for your advice.

My Question is, my First Time Home buyer tax credit was Denied by IRS.
On Calling them, they informed that I do have primary Residence for which I was taking tax break in past.

I do bought primary residence in INDIA in year 2000, stayed till 2001 and has not visited to INDIA since 2005 Dec.Currently my parents are living in that house.

Me and My Wife, has never owned house in US.

As per below FAQ from IRS website, I believe that i should get that tax credit.

Q. Would I be considered a first time homebuyer if I owned a principal residence outside of the United States within the previous three years?

A. Yes. A taxpayer who owned a principal residence outside of the United States within the last three years is not disqualified from taking the credit for a purchase within the United States.

Please help.

Regards,
Sam

**Mr. Knowitall** · 11-14-2010, 07:10 PM

I can't review your past U.S. tax returns from here. I suggest having them reviewed by an accountant to help you figure out what the IRS is looking at as disqualifying.

jk · 11-14-2010, 07:18 PM

Quoting samik73

My Question is, my First Time Home buyer tax credit was Denied by IRS.
On Calling them, they informed that I do have primary Residence for which I was taking tax break in past.

so, were you claiming a tax deduction for some home?

**samik73** · 11-15-2010, 04:03 AM

Yes. I was showing mortgage loan interest of principal resdience as deduction.

I want to confrim as per faq on irs website, am I eligible for tax credit with primary residence abroad bought 10 yrs before and not even visited since 5 years.

Thanks for your reply.

**Bubba Jimmy** · 11-15-2010, 05:40 AM

Do you have rental property? The IRS has been denying this credit incorrectly to many people, including those who deducted mortgage interest and/or property taxes on Schedule E for rental property. Something reported on some tax return in the previous 3 years indicates to them that you owned a house, and their presumption for the purposes of the FTHB credit is that it was your home. You need to continue corresponding with them about this. Get a transcript of the tax returns you've filed and review to see what might show that you owned a house. And, even if you didn't report anything on your tax return, a mortgage company will report mortgage interest independently to the IRS on a form 1098. They will use that to make an incorrect determination, mainly because there were so many fraudulent claims for this credit. But be persistent in pursuing your claim if it is legit. Eventually it will shake loose, but you can't just roll over.

**flyingron** · 11-15-2010, 06:27 AM

Bubba is right, the first time rule only applies to principal residences. However, I see no exemption for non-US properties. Just as you are able to use a non-US residence as a qualified home, a principal residence elsewhere can be counted against you.

If you can demonstrate your US non-owned home was your principal residence then you should qualify.

**samik73** · 11-15-2010, 04:56 PM

Thank you so much.

Yes that is correct, house claimed on tax return located abroad is primary residence and never rented.Currently my parents are living in house.

Also one more thing, denied notice is misplaced in mail , on calling IRS representative told that you have to go to court.

I really dont know what are next steps for me.