| Will a Taxpayer qualify for 1st Time HomeBuyer credit if part of the home is rented?
Lets assume a taxpayer purchased a home that qualified for the First Time Homebuyer Credit and rented out a portion of the home and reported the rental income on Schedule E. A question arises as to whether or not that taxpayer would still qualify for the First Time Homebuyer Credit if he or she used the home as their principal residence?
Well, the answer is "Yes", and according to the IRS, " if taxpayer is a first-time homebuyer of a principal residence, that taxpayer would generally be able to claim the first-time homebuyer credit. But, there are certain limitations that apply that including a limitation based on modified adjusted gross income.
Please review "Form 5405, First-Time Homebuyer Credit," for more details.
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