Land and Lot

Today TaxMama hears from Mark in the TaxQuips Forum, who got denied – again. Let me summarize – Mark bought land in March of 2009. Bought a manufactured home in April of 2010 – and had the property graded, receiving the occupancy permit by June of 2010 – before the deadline for the First Time Homebuyer’s Credit. After two attempts, IRS has denied his credit for the value of the land, saying it was a separate transaction, not part of the home purchase.


 Dear Mark,

IRS might be right about the two separate transactions. However, they didn’t give you the citation you requested, did they? Why?

Because I don’t think there IS one.

Your two transactions were related. You would not have bought the land, except to place the home on it. It sounds as if it’s too late to try for Tax Court, so…

You can do what IRS suggests – file in the US Court of Claims. It’s actually not as hard as you might think – or expensive. This is like a Federal version of Small Claims Court – in that, you can easily represent yourself. Find the court nearest you. They will have a complete website – even with information about access to some pro-bono legal services.

The other thing you might consider first, though, is to contact the Taxpayer Advocate Service (TAS) . They have been very helpful to us in our cases and can bring you faster resolution. However, before you do this, do your own research in the various laws that formed the Homebuyers Credit. If you don’t know where to start, I’ve already dug up all the laws for you in this course – Homebuyers Credit for Tax Professionals.

If you cannot find anything about two separate transactions (which you won’t), find anything you can about the rules of purchase where the information SHOULD BE, but is NOT. Print out those parts of the 4 laws (or the ones that mention or modify the rules for the purchase) and give those to TAS with your written analysis.

And remember, you can find answers to all kinds of questions about the homebuyers credit. Where? Where else? At

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