Ezel / IRS Rulings / 201104040

CCA 201104040: New construction may qualify for the long-time resident credit

Number
201104040
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
First-Time Homebuyer Credit
Topics
Income and deductions
Code sections
§ 36
Ruling dated
December 10, 2010
Publicly released
January 28, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2011
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that a taxpayer who completed construction and occupied a new home on land where a previous home stood could qualify for the $6,500 first-time homebuyer credit as a long-time resident. The taxpayer had owned and used the previous home for the required period. The advice states that the land's basis should not be included in the purchase price of the new home because the land purchase was not sufficiently close in time to the new construction. The conclusion was specific to the facts described in the advice.

Ruling snapshot

  • Question: Can a taxpayer qualify for the long-time resident first-time homebuyer credit after building and occupying a new home on land with a former home?
  • Outcome: Advice given.
  • Key authorities: IRC § 36.

Full text (IRS public release)

ID: CCA_2010121016053543 Number: 201104040
Release Date: 1/28/2011
Office: ---------
UILC: 36.00-00

From: --------------------
Sent: Friday, December 10, 2010 4:06:01 PM
To: ---------------------
Cc:
Subject: RE: Counsel Opinion Requested of ------------------

--------

Sorry for the delay. This follow up question had fallen off my radar. I double checked with the counsel SMEs and their view is that a taxpayer who completes construction and occupies a new home on land with a previous home that the taxpayer owned and used for the required time can qualify for the $6,500 credit as a long-time resident. In this case, the taxpayer would not include any basis in the land as part of the purchase price of the new home because the purchase of the land was not sufficiently proximate in time to the construction of the new home.

Please let me know if you have additional questions.

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