First time home buyer

**JoJoBean8** · 08-10-2009, 11:24 AM

I hope I am putting this in the right section if not I apologize. I have a question about being first time home buyers. I know that when buying your first home you can take money from you Roth IRA as a down payment and now they have the tax credit for first time homebuyers. I thought this would really help my hubby and I buy our first home but my husband has already been a " homeowner" at least on paper. My inlaws buy properties and put them in others people's names. When my hubby was 18 his parents bought a home to rent out and put it under my husbands name. This was in 2001 we got married in 2006 and for over a year I nagged him to get it out from under his name because we were technically liable for it and we weren't getting the rent money from it. In 2007 he sold it to his father who turned around and sold it to his cousin. So my question is will we still be able to borrow from our Roth and get the tax credit since his parents have made him a "homeowner" already?

**Preston** · 08-10-2009, 04:59 PM

From what I understand about the tax credit is that you have to have LIVED in a property within the past three years so you may still qualify for the credit.. Seeing that it was an investment property that was rented out may be all info that is necessary.

I'm just wondering who the hell his parents think they are that they can buy things in other peoples' names. To me this sounds like fraud.

**peanut** · 08-10-2009, 07:23 PM

It does seem very odd that they would buy in other people's names... Or are they buying homes and 'gifting' them to people by putting their names on the title? Or is this just some way to get out of paying higher taxes? Interesting. If it's the latter, I'd be a bit concerned if I were your DH (also his parents!)...

**Greebo** · 08-10-2009, 08:15 PM

Originally Posted by JoJoBean8

I hope I am putting this in the right section if not I apologize. I have a question about being first time home buyers. I know that when buying your first home you can take money from you Roth IRA as a down payment

Horrible idea. The market is way down right now, so you'd be making a huge paper loss into a huge MONEY loss. On top of that, any value increase in a house is offset by the interest rate of the mortgage, and house prices will go up, but not fast, not for a while.

**JoJoBean8** · 08-10-2009, 08:30 PM

Originally Posted by peanut

It does seem very odd that they would buy in other people's names... Or are they buying homes and 'gifting' them to people by putting their names on the title? Or is this just some way to get out of paying higher taxes? Interesting. If it's the latter, I'd be a bit concerned if I were your DH (also his parents!)...

No they are buying them and they put them into other's names so they can't get around taxes. It's horrible I know and my husband didn't know anything better since in their culture your parents are always right. I would love to tip off the IRS but I don't think my hubby would ever forgive me.

**McD** · 08-10-2009, 08:43 PM

Originally Posted by JoJoBean8

No they are buying them and they put them into other's names so they can't get around taxes. It's horrible I know and my husband didn't know anything better since in their culture your parents are always right. I would love to tip off the IRS but I don't think my hubby would ever forgive me.

I'd be worrying about the tax implications for your husband. Your husband has a house in his name that is being used as a rental property. Is he claiming the rental money as income on his taxes?This could really come back to haunt the two of you. I'd be checking with a tax advisor, personally.

**JoJoBean8** · 08-11-2009, 08:36 AM

Originally Posted by MrsMcDowell

I'd be worrying about the tax implications for your husband. Your husband has a house in his name that is being used as a rental property. Is he claiming the rental money as income on his taxes?This could really come back to haunt the two of you. I'd be checking with a tax advisor, personally.

Would it still effect us even though the house got sold back to his father in 2007?

**Greebo** · 08-11-2009, 08:44 AM

Originally Posted by JoJoBean8

Would it still effect us even though the house got sold back to his father in 2007?

If your husband made a profit on the house, yes.

**Telephus44** · 08-11-2009, 10:15 PM

Just wanted to add that the limit for taking money from a ROTH for a first-time home purchase is $10,000, and the account has to be at least 5 years old. You can find more info at www.irs.gov in publication 590.