26 USC 36 - First-time homebuyer credit

U.S Code last checked for updates: Nov 22, 2024

§ 36.

First-time homebuyer credit

(a)

Allowance of credit

(b)

Limitations

(1)

Dollar limitation

(A)

In general

(B)

Married individuals filing separately

(C)

Other individuals

(D)

Special rule for long-time residents of same principal residence

(2)

Limitation based on modified adjusted gross income

(A)

In general

The amount allowable as a credit under subsection (a) (determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as—

(i)

the excess (if any) of—

(I)

the taxpayer’s modified adjusted gross income for such taxable year, over

(II)

$125,000 ($225,000 in the case of a joint return), bears to

(ii)

$20,000.

(B)

Modified adjusted gross income

(3)

Limitation based on purchase price

(4)

Age limitation

(c)

Definitions

For purposes of this section—

(1)

First-time homebuyer

(2)

Principal residence

(3)

Purchase

(A)

In general

The term “purchase” means any acquisition, but only if—

(i)

the property is not acquired from a person related to the person acquiring such property (or, if married, such individual’s spouse), and

(ii)

the basis of the property in the hands of the person acquiring such property is not determined—

(I)

in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or

(II)

under section 1014(a) (relating to property acquired from a decedent).

(B)

Construction

(4)

Purchase price

(5)

Related persons

(6)

Exception for long-time residents of same principal residence

(d)

Exceptions

No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if—

(1)

the taxpayer is a nonresident alien,

(2)

the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the close of such taxable year,

(3)

a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year, or

(4)

the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase.

(e)

Reporting

(f)

Recapture of credit

(1)

In general

(2)

Acceleration of recapture

If a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection (a) (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the end of the recapture period—

(A)

the tax imposed by this chapter for the taxable year of such disposition or cessation shall be increased by the excess of the amount of the credit allowed over the amounts of tax imposed by paragraph (1) for preceding taxable years, and

(B)

paragraph (1) shall not apply with respect to such credit for such taxable year or any subsequent taxable year.

(3)

Limitation based on gain

(4)

Exceptions

(A)

Death of taxpayer

(B)

Involuntary conversion

(C)

Transfers between spouses or incident to divorce

In the case of a transfer of a residence to which section 1041(a) applies—

(i)

paragraph (2) shall not apply to such transfer, and

(ii)

in the case of taxable years ending after such transfer, paragraphs (1) and (2) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor).

(D)

Waiver of recapture for purchases in 2009 and 2010

In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008—

(i)

paragraph (1) shall not apply, and

(ii)

paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer.

(E)

Special rule for members of the armed forces, etc.

(i)

In general

In the case of the disposition of a principal residence by an individual (or a cessation referred to in paragraph (2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual’s spouse, for qualified official extended duty service—

(I)

paragraph (2) and subsection (d)(2) shall not apply to such disposition (or cessation), and

(II)

if such residence was acquired before January 1, 2009, paragraph (1) shall not apply to the taxable year in which such disposition (or cessation) occurs or any subsequent taxable year.

(ii)

Qualified official extended duty service

For purposes of this section, the term “qualified official extended duty service” means service on qualified official extended duty as—

(I)

a member of the uniformed services,

(II)

a member of the Foreign Service of the United States, or

(III)

an employee of the intelligence community.

(iii)

Definitions

(5)

Joint returns

(6)

Return requirement

(7)

Recapture period

(g)

Election to treat purchase in prior year

(h)

Application of section

(1)

In general

(2)

Exception in case of binding contract

(3)

Special rule for individuals on qualified official extended duty outside the United States

In the case of any individual who serves on qualified official extended duty service (as defined in section 121(d)(9)(C)(i)) outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual’s spouse—

(A)

paragraphs (1) and (2) shall each be applied by substituting “May 1, 2011” for “May 1, 2010”, and

(B)

paragraph (2) shall be applied by substituting “July 1, 2011” for “July 1, 2010”, and for “October 1, 2010”.

(Added Pub. L. 110–289, div. C, title I, § 3011(a), July 30, 2008, 122 Stat. 2888; amended Pub. L. 111–5, div. B, title I, § 1006(a)–(c), (d)(2), (e), Feb. 17, 2009, 123 Stat. 316, 317; Pub. L. 111–92, §§ 11(a)–(g), 12(a)–(c), Nov. 6, 2009, 123 Stat. 2989–2992; Pub. L. 111–198, § 2(a), (b), July 2, 2010, 124 Stat. 1356.)

cite as: 26 USC 36