Legal Question in Tax Law in California
I previously owned a home that I sold in August 2006. I then rented from my sisters (whom I sold my share of the house too), but still recieved 50% of the interest write off because I was making the majority of the payment.
In October of 2009, I purchased a house with an FHA loan. Since it was beyond the 3 year requirement, I was told by my realtor I would recieve the $8,000 tax credit. Well after much delay, the IRS just informed me they have denied my FHA credit because Im a previous homeowner. The rules state must not have owned a home within the last 3 years, so I thought I would be ok.
Im cautious of contacting the IRS, because although I made sure with an accountant, Im not sure if recieving the interest write off was ok even though I wasn't the princible owner. Thank you for any help.
1 Answer from Attorneys
if you were not an owner of the home, your deduction of the mortgage interest was not proper. see:
"http://www.irs.gov/publications/p936/ar02.html#en_US_publink1000229900"
if you are still within the statute of limitations, you may be able to filed amended tax returns removing the mortgage interest deduction for the home that you did not own. once that is completed you may be able to receive the tax credit. as the irs will assess penalties and interest for the prior years on the amended returns, you will need to calculate the estimated total cost of the amended returns against the benefit of the potential tax credit. keep in mind that the irs could audit the prior years and assess additional taxes, penalties and interest in any case.
finally, if you are planning to file the amended returns, you will need to take all necessary action to preserve your appeal rights as to the notice you have received regarding the tax credit.
you should retain a tax attorney, cpa or enrolled agent experienced with these issues to assist you with this process.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
