Syndicated WaPo columnist Kenneth Harney points out that new IRS guidelines about the renewed and expanded home buyer tax credit were recently released. There’s a great Q&A section in the new guidelines, and Harney plays one of them out in his column:
For example, some taxpayers seeking the extended $8,000 credit are uncertain about co-purchase and co-signing situations, especially involving parents and adult children. When a homeowning parent co-signs for a mortgage with a son or daughter and both names appear on the note, can the son or daughter qualify for the first-time purchaser credit?
The IRS says the parent clearly does not qualify for any portion of the credit because he or she already owns a principal residence. But if the son or daughter has not owned a house during the three years preceding the purchase and qualifies on income, he or she can be allocated the entire $8,000.