Buying house from my parents

cowgirl77October 30, 2009

Hi,

My husband and I live with my parents in TX now. We are thinking about to buy the house from my parents since there is tax credit this year.

Do we have to put this house in the market to make the transaction?

What is the easiest and cheapest way to make this transaction?

If my parents transfer the title to us, do we still qualify to claim the first home buyer tax credit?

Thanks in advance,

Cowgirl

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lyfia

You don't have to put it on the market. I don't really think you need to even use an attorney for this as I didn't when we bought a house from my ex-MIL. All we did was get a mortgage and a title company did the paperwork to transfer the title and put the mortgage liens etc. and this was in TX.

Are you getting a mortgage? If so they can likely recommend a title company to use as well, or you can ask friends who they've used. We've used many different ones over the years and I've not had any issues with any.

    Bookmark   October 30, 2009 at 6:46AM
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jlhug

Please sit down with an experienced tax person and ask questions. You do not qualify for the first time homebuyers credit if you purchase a home from a related party.

Here is a link that might be useful: Form 5405

    Bookmark   October 30, 2009 at 7:16AM
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jlhug

Also, if your parents just deed the property to you, there may be gift tax returns that need to be filed.

You really need to sit down with an experienced tax professional. I'd suggest an enrolled agent who is generally less expensive than a tax attorney or CPA.

Remember not all attorneys or CPAs are knowledgable about taxes.

    Bookmark   October 30, 2009 at 7:19AM
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mb50

Hi! Relative selling to a relative does not qualify for the $8000 tax credit.

Sorry for the bad news.

mb

    Bookmark   October 30, 2009 at 5:42PM
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theroselvr

If my parents transfer the title to us, do we still qualify to claim the first home buyer tax credit?

Are you actually paying for the house? Stupid question but the way it reads is they are signing it over to you for no money.

    Bookmark   October 31, 2009 at 8:14PM
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