What is a New Home

Today TaxMama hears from Linda in Florida, who tells us. “I have been buying a piece of land for about 9 years. Recently I purchased a mobile home ($500.00 cash) to put on it. Does this qualify me for the new home purchase tax refund?”

Dear Linda,

We’ve had many questions from people who have placed homes on land they didn’t own…or bought motor homes…or…

In your case, you can definitely claim the first time homebuyers credit for the price of the mobile home purchase. That is – as long as you move into it and make it your primary residence. That would net you about $50 (10% of the price of the mobile home).

However, would you get any credit for the land cost? That’s a good question. And I don’t know the answer. Why?

Well, you’ve been buying it for some time. In other words, your purchase date was many years ago. Now, you’re just making payments. The purpose of the tax credit is to stimulate new buying.

Since you already owned the land, even though you didn’t use it as your personal residence, I doubt that the cost of the land would qualify for the first time homebuyers credit.

I could be wrong. So stay tuned to the comments to TaxQuips #1277. You will find comments and ideas from other tax pros. http://taxquips.com/index.php?id=1277

And remember, you can find answers to all kinds of questions about the first time homebuyers credit and other tax issues, free. Where? Where else? At TaxMama.com

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