The date of first occupancy must be by June 30, 2010, provided a binding sales contract was in force by April 30, 2010.

The date you can legally occupy a house is often determined by the local building department and it might hinge on their idea of when a "Certificate of Occupancy" can be issued. You should understand the rules way in advance.

You have to occupy the residence. That and having a contract with the builder to construct the home seem to be the main requirements for the new house. There are also occupancy and ownership requirement for your current residence. I don't think the IRS cares about how complete the house is, as long as you occupy it. Any issues about unfinished construction would be between you and the local authorities.

The day you occupy it is treated as the day you purchased the new home for for tax purposes, but only if you contract to have one built. If you buy a home and land as a package, the rules are different.

Not having a CO might be sticky if you were audited. If you could otherwise prove you moved in you would be OK, in my opinion.

Check out the IRS web site for their details. Don't take anything anyone else says as gospel.

The legal definition of "occupancy" is the condition or act of possessing or living in a dwelling or on some property. What the government thinks is a necessary condition for "occupancy" is not clear but I'm sure it is defined in the original act and government publications.

I would not rely on the idea that moving in satisfies the requirement for "occupancy" unless you can find that written somewhere. Unless you do I would try to get a Certificate of Occupancy from the town or a Certificate of Substantial Completion from an architect. Documents from your insurance carrier, granters of warranties, etc. might also support your claim of occupancy.

A Certificate of Substantial Completion is a certified statement, prepared by an architect (or perhaps the owner's engineer, construction manager or inspector) on the basis of his inspection stating that the work, or designated portion thereof, is substantially complete and ready for occupancy for its intended use; formally establishing the date of substantial completion; defining the interim responsibilities of the owner and the contractor for the provision of heat, maintenance, and security, and for possible damage and insurance; and fixing the time within which the contractor shall complete the items on the inspection list (punch list).

Form G704 from the AIA is a good one but it is copyrighted. There are modified versions on the internet but I would buy the AIA form or another preprinted one online for this use. I would cover myself in all possible ways and avoid relying on the local building inspector who will have his own idea about when a C of O should be issued. I've known projects where the C of O was never issued or issued months later.

Here is a link that might be useful: form example

Ignore MACV. He apparently got a lump of coal in his stocking. Rely on the IRS guidance, since they and only they will approve or disapprove of your $6,500 tax credit.

Here is a link that might be useful: IRS Web Site

thanks for that link.... it states if a buyer enters a contract by April 30, they have until June 30 to settle on the purchase. (first time home buyers) I'm going for the $6500 credit being I lived in my previous house that we just sold for 30 yrs. Just wonder what settle on purchase means. I would think a CO would meet it but I'll give them a call or stop in local office (IRS).....thanks

Settle means settlement, the day when you are given legal possession of the house, often during a meeting at a title company office. However, if you have a contract with a builder to build you a house, as opposed to buying a house from a builder, the settlement date for tax purposes is the day you move in.

All this information is there on the IRS web site. You just have to dig for it by following their links. It is also in the various publications that you can order or download from them.

creek side, you can make your point without discrediting the advice of others or making snarky personal remarks.

That's advice you should take yourself, macv.

I believe crusier 1's original question was how to establish the "date you first occupied [the new house]" as is required by the IRS if cruiser hired the builder to construct the house and therefore already owns it.

Since the IRS gives no guidance for how to document that date it is possible for the date claimed on the IRS form to be challenged. That is unlikely but I was recommending that further documentation be acquired for additional protection especially if it is inconvenient to actually live in the house at the time of the deadline. I also suspect the use of the phrase "first occupied" allows some flexibility regarding occupancy after that date has been documented.

If cruiser 1 does not own the property, then the "date you purchased [the new house]" would be the relevant date and easily documented.

If that information is not useful, it should be ignored.

In the future, I will not participate in any discussion where creek side makes a comment.

Would closing on the loan be considered "settlement on the purchase"?

"Would closing on the loan be considered 'settlement on the purchase'?"

Possibly.

Usually settlement is when the actual ownership of the house is transferred to the buyer, who promptly gives a lender a security interest using a mortgage or deed of trust.

The feds have to promulgate rules that can be applied in all jurisdictions with minimal guidance. Any further action is regulatory and requires publication, then a public comment period before the regulation can be adopted and placed into force.

The IRS will try to use the same terminology it has used previously.

Occupancy means physically moving in your personal property and living in a house (as in staying over night).

We closed on our loan months ago, both ends of it. Ergo, we settled. That DOES NOT mean we "settled" for the purposes of the tax credit since we contracted with a builder to construct a house for us on our land, which we have yet to occupy.

Again, IRS rules say that for the purposes of the tax code, settlement in the case of a home built under contract takes place when the home is occupied.

Occupancy is the key for us, and from what you have posted, Tracey, you too. Brickeyee's definition of occupancy is spot on, going by the IRS guidance, which is pretty much all that matters.

So, if you built your own home and did not have a contract with a builder, are you excluded?

Just my luck. We will finally move in after almost 4 years of DIY building. It surely would be nice to get that tax credit.

That's a good question. I have no idea what the answer is. If you had a major contract with anyone to build any portion of the home, and it was within the alloted time frame, it would be worth looking into.

Definitely visit the IRS web site.

cruiser1 where are you building? we are going to build in allegan, once our house sells. we have the plans and a signed contract with our builder (to lock in our price).
Our builder says 5-6 months for our build too.
Who's your builder?

Building in Allendale (Grand Valley College) 1900 sq.ft. and hope to start by Feb 1. Builder says he can have a C of O by June 30. I called the IRS office in Grand Rapids and got a recording. " Any ?????? you will have to stop in and see us" I'll try this week.

Has anyone claimed this credit yet? We are going to try to claim it. Our house is supposed to be done at the end of Sept so we'll be cutting it close.

What all is needed to claim the credit? Will a CO suffice? Or do we also need the HUD-1? I looked on the irs site and it seemed to indicate that all we need is the CO by 9/30 and we are good. We have a construction loan for the build that we closed back in May but may not convert to permanent until after 9/30. Would that be a problem?

Thanks!

Wei Yan

Thank you for posting this about the credit being extended. We are closing tomorrow (Lord willing) and had our contract signed on March 31st of this year. Below is a link my real estate agent sent me where you should be able to find the answer to your questions.

Here is a link that might be useful: Federal Housing Tax Credit

littlewomen, hope your closing went well. You closed in plenty of time so shouldn't have a problem claiming the credit as long as you met all the other criteria.

From my readings, it sounds like I can get the credit by submitting a CO instead of the HUD-1 but have been getting conflicting information from various accountants. The accountants are saying we have to close on the permanent financing by 9/30 to claim the credit.

Anyone in a similar situation care to chime in on this?

Thanks!

Wei Yan