Will I receive the $8000 tax credit if I buy a house in another state?

Question

I currently reside in CA, but wanted to buy a house in AZ, claiming residence there, but renting a room here until finishing college.

What criteria does the IRS use to determine residence?  Do you have to move in right after closing, or can the house sit for a few months?

Would I have to claim the AZ address on my 2010 tax returns?

Answer 1

Dear Pea:   It could work but you must establish residence in the new home. Living in a dorm or apt is a temporary absence from home. Establish banking in AZ, get an AZ drivers license, register to vote in AZ as well as other items indicating your desire to claim AZ as your primary residence.  IRS form 5405 has the instructions for the $8000 credit. You can amend '08 and get the money now if you buy before Dec 1 2009.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent

Answer 2

www.irs.gov  form 5405
Sounds like you DON'T qualify, but check it out. . .

Different states don't matter, what matters is home ownership.  Different addresses don't matter, what matters is home ownership.

Answer 3

Your current domicile is California.  Until you actually finish college and move, that won't change.  

So, NO, the IRS isn't going to buy your story and give you an $8000 credit.

Answer 4

You might repost your question under "real estate".