Date of "Purchase" Is Key Date For FTHBTC Purposes On Existing Homes.

The petitioner bought an existing home in January of 2009 that needed substantial repairs to make it habitable.  The petitioner began using the house in May of 2009 after making over $10,000 of repairs.  The petitioner claimed the First Time Homebuyer Tax Credit (FTHBTC) based on the purchase price plus the repair cost.  IRS disallowed the part of the credit attributable to the repairs (note - the house was a low-cost home substantially less than the maximum credit allowed).  While I.R.C. Sec. 36(c)(4) bases the credit on the "purchase price" of the home and defines that phrase as the "adjusted basis of the principal residence on the date the residence is purchased", the court determined that "purchase date" is normally the date when the taxpayer takes legal or equitable title with respect to existing housing.  But, the phrase is the date occupancy is established for a constructed residence based on Woods v. Comr., 137 T.C. 159 (2011).  Here, the court determined that the petitioner did not "construct" the house and that, therefore, the credit was to be computed with respect to the purchase price when he took title to the property and the IRS determination was upheld.  Leslie v. Comr., T.C. Sum. Op. 2014-65.