I was divorced and signed over the deed of our house to my ex wife September 2005. I rented until February 2009 and closed on a 8,000 home. We agreed in the divorce that I would be responsible for a home equity loan I took out to start a business. Since I was renting and paid child support , it took me 4 years to pay that loan off. I did NOT, however, own a home during that entire period. And, as stated, the deed was signed over. I did however claim an interest deduction from the 1098 forms I received every year during the time it took me to pay off the home equity loan. My question is do I qualify for the 00 First time buyers credit. I, like many others, am being reviewed this year. I did claim the credit and I know I qualify for the 3 years without buying clause. I’m just wondering what the IRS is going to think when they see Home Mortgage deductions from the 1098 I received until the loan was paid. Help, please
To: I love Idol.
Thank you for the very thought out response. All those people screaming tax fraud. Give me a break. I received 1068forms. I THOUGHT I was supposed to itemize the interest. In fact H & R block did my taxes that year and added it to my deduction.
To answer your question, the mortgage company took me off the mortgage legally 4 years ago. But I still felt responsible for the home equity loan so I agreed to pay that as well. I just didn’t know you couldn’t claim an interest deduction if you were not on the mortgage. That seemed to be the general concensus. I’m calling my new CPA tomorrow. Any other ideas? If you have something productive to say, this goes out to everyone.

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