Filed: Jan. 30, 2012
Latest Update: Nov. 14, 2018
Summary: FRANCIS T. FOSTER AND MAUREEN P. FOSTER, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 16696–10. Filed January 30, 2012. Ps sold their house on June 6, 2007, and purchased another house on July 28, 2009. Ps, pursuant to I.R.C. sec. 36, claimed a first-time homebuyer credit relating to their new house. Held: Ps owned a present interest in a principal residence within three years prior to the date of purchase of the new house and, thus, are not eligible for a first-time ho
Summary: FRANCIS T. FOSTER AND MAUREEN P. FOSTER, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 16696–10. Filed January 30, 2012. Ps sold their house on June 6, 2007, and purchased another house on July 28, 2009. Ps, pursuant to I.R.C. sec. 36, claimed a first-time homebuyer credit relating to their new house. Held: Ps owned a present interest in a principal residence within three years prior to the date of purchase of the new house and, thus, are not eligible for a first-time hom..
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FRANCIS T. FOSTER AND MAUREEN P. FOSTER, PETITIONERS
v. COMMISSIONER OF INTERNAL REVENUE,
RESPONDENT
Docket No. 16696–10. Filed January 30, 2012.
Ps sold their house on June 6, 2007, and purchased another
house on July 28, 2009. Ps, pursuant to I.R.C. sec. 36, claimed
a first-time homebuyer credit relating to their new house.
Held: Ps owned a present interest in a principal residence
within three years prior to the date of purchase of the new
house and, thus, are not eligible for a first-time homebuyer
credit.
Francis T. Foster and Maureen P. Foster, pro sese.
Michael T. Shelton, for respondent.
51
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52 138 UNITED STATES TAX COURT REPORTS (51)
FOLEY, Judge: After concessions, the issue for decision is
whether petitioners are entitled to a section 36 1 first-time
homebuyer credit relating to 2008.
FINDINGS OF FACT
In 1974, Francis and Maureen Foster purchased a resi-
dence in Western Springs, Illinois (old house). In February
2006, petitioners listed the old house for sale and began to
spend considerable time at Mrs. Foster’s parents’ house in La
Grange Park, Illinois (parents’ house). Petitioners did not
pay rent or pay for utility services at the parents’ house.
On April 6, 2006, Mrs. Foster renewed her State-issued
driver’s license which set forth the old house address. Peti-
tioners also provided that address on their 2005 joint Federal
income tax return filed October 16, 2006. During 2006 and
2007, at the old house, which was fully furnished, petitioners
maintained utility services, frequently stayed overnight,
hosted family holiday gatherings, kept personal belongings,
accessed the Internet, 2 and received bills and correspond-
ence.
On April 7, 2007, petitioners entered into an unconditional
contract to sell the old house. Later that month, petitioners
filled out an apartment rental application on which they
listed the old house as their current address. Petitioners
executed the apartment rental agreement on June 1, 2007;
finalized the sale of the old house on June 6, 2007; and pur-
chased a residence in Brookfield, Illinois (new house), on July
28, 2009.
On their joint Federal income tax return relating to 2008,
petitioners claimed an $8,000 first-time homebuyer credit
(FTHBC) relating to their purchase of the new house. 3
Respondent subsequently issued petitioners a notice of defi-
ciency relating to 2008, determining that they were not enti-
tled to claim any portion of the FTHBC. Petitioners, on July
23, 2010, while residing in Illinois, timely filed a petition
with the Court.
1 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect
for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Proce-
dure.
2 Internet services were not available at the parents’ house.
3 Pursuant to sec. 36(g), a taxpayer may claim an FTHBC on the taxpayer’s Federal income
tax return for the calendar year preceding the year of purchase of the principal residence.
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(51) FOSTER v. COMMISSIONER 53
OPINION
Section 36(a) allows a credit for a first-time homebuyer of
a principal residence. A ‘‘first-time homebuyer’’ is any indi-
vidual (including an individual’s spouse) having no present
ownership interest in a principal residence for three years
prior to the date of purchase of a principal residence. Sec.
36(c)(1). Thus, petitioners are eligible as first-time home-
buyers if they had no interest in a principal residence after
July 27, 2006, and before July 28, 2009 (i.e., the period three
years prior to the purchase of their new house). Petitioners
owned the old house until June 6, 2007, but contend that
they ceased using it as their principal residence in February
2006. 4 We disagree.
Whether property is used by a taxpayer as a principal resi-
dence depends upon all the facts and circumstances. See sec.
36(c)(2); sec. 1.121–1(b)(2), Income Tax Regs. In addition to
the taxpayer’s use of the property, relevant factors include,
but are not limited to, the address listed on the taxpayer’s
tax returns and driver’s license and the mailing address for
bills and correspondence. Sec. 1.121–1(b)(2), Income Tax
Regs.
The old house remained petitioners’ principal residence
after July 27, 2006. Petitioners continued to identify the old
house as their address when Mrs. Foster renewed her
driver’s license and when they filed their Federal income tax
returns. Furthermore, petitioners readily acknowledge that,
at the old house, they continued to receive bills and cor-
respondence, maintained utilities, kept furniture and other
possessions, frequently slept overnight, and hosted family
during holidays. Conversely, at the parents’ house, peti-
tioners did not pay rent or contribute towards the cost of
utility services.
The old house remained petitioners’ principal residence
after July 27, 2006, and thus, three years did not lapse prior
to their purchase of the new house. Accordingly, petitioners
are not entitled to the FTHBC relating to 2008.
4 Pursuant to sec. 7491(a), petitioners have the burden of proof unless they introduce credible
evidence relating to the issue that would shift the burden to respondent. See Rule 142(a). Our
conclusions, however, are based on a preponderance of the evidence, and thus the allocation of
the burden of proof is immaterial. See Martin Ice Cream Co. v. Commissioner, 110 T.C. 189,
210 n.16 (1998).
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54 138 UNITED STATES TAX COURT REPORTS (51)
Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
Decision will be entered for respondent.
f
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