CCA 200947056: Principal-residence factors for the first-time homebuyer credit

Plain-English summary

This Chief Counsel advice responds to questions from the Baltimore Sun. It says the first question was primarily a gift-tax question and that a redacted office has jurisdiction over gift tax. The second question concerns whether a residence is a taxpayer's principal residence for the first-time homebuyer credit. The advice says that when a taxpayer uses more than one property as a residence, the determination depends on all the facts and circumstances, including time spent at each property, employment, family residence, tax and identification records, mailing address, banks, and affiliated religious or recreational organizations.

Ruling snapshot

• Question: How is a principal residence determined when a taxpayer uses more than one property for purposes of the first-time homebuyer credit?
• Outcome: Advice given
• Key authorities: IRC § 36; Treas. Reg. § 1.121-1(b)(2)

Full text (IRS public release)

ID: CCA-624164-09 Number: 200947056
Release Date: 11/20/2009
Office: ----------------
UILC: 36.00-00

From: -------------------------
Sent: Wednesday, June 24, 2009 4:41 PM
To: --------------------
Cc: --------------------------------------------------
Subject: RE: More questions from the Baltimore Sun

------ We have looked at the first question and concluded that it is primarily a gift tax question. ------------ has jurisdiction over gift tax.

The second question concerns whether a residence is a principal residence for purposes of the first-time homebuyer credit. In the case of a taxpayer using more than one property as a residence, whether a particular property is a principal residence depends on all the facts and circumstances.

Section 1.121-1(b)(2) of the Income Tax Regulations governs the definition "principal residence" for purposes of the first-time homebuyer credit. It provides that if a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer uses a majority of the time during the year ordinarily will be considered the taxpayer's principal residence. In addition to the taxpayer's use of the property, relevant factors in determining a taxpayer's principal residence, include, but are not limited to--

(i) The taxpayer's place of employment;

(ii) The principal place of abode of the taxpayer's family members;

(iii) The address listed on the taxpayer's federal and state tax returns, driver's license, automobile registration, and voter registration card;

(iv) The taxpayer's mailing address for bills and correspondence;

(v) The location of the taxpayer's banks; and

(vi) The location of religious organizations and recreational clubs with which the taxpayer is affiliated.

I hope this helps.

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