YES, the IRS has been rejecting first-time buyer claims from anyone who shows as Form 1098 Mortgage Interest Expense in their prior years. Many of these rejected first timers are entitled to the credit because their previous mortgage interest deduction is for a timeshare, mobile home, boat or other recreational property.
Here is some advice from Enrolled Agent Eva Rosenberg of TaxMama.com
- Respond to the IRS immediately and tell them why their rejection is wrong. Be prepared to prove that the mortgage the IRS is seeing isn't on a personal resisdence. First-time home buyers are entitled to own other types of real estate and still get the home buyers credit, so provide proof that the previous mortgage was on something else.
- Send a letter explaining the situation and providing proof of a previous rental or other non ownership living situation, including copies of rental contracts for the past three years, an old driver's license showing that address, utility bills, etc.
- Home buyers who believe the IRS may view their situation in this way should be proactive, providing proof that they are a first time buyer when they initially file for the credit.
- Anyone who is rejected after two attempts to explain the problem to the IRS should call the Taxpayers Advocate Service toll free, (877) 777-4778, their Congressman, and their Senator, Rosenberg advises.
BUYERS VS SELLERS
Buyers are killing deals in this tough market by requesting over the top concessions of sellers after home inspections!!!
According to Glen Kelman, CEO of Redfin, "We see buyers who must have learned their moves from The World Wrestling Federeration. They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the altenative is putting the house back on the market as damaged goods."
Questions? Comments? Advice?
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SEE YOU AROUND THE NEIGHBORHOOD!!!
