I thought you were also excluded from the first-time homebuyer credit if you bought your house from a family member, is this the case? My wife and I are about to purchase a house from her parents, is there a way for us to get the credit?
Unfortunately, you are correct. The first-time buyer credit enacted in 2008 and expanded in 2009 does not apply if you purchase your home from a related party. According the IRS, a related party includes spouses, family members (e.g., siblings, half-siblings, etc.), ancestors (e.g., parents, grandparents, etc.) and lineal descendants (e.g., children, grandchildren, etc). For purposes of this credit, step-relatives are not considered a related party since they are not ancestors or lineal descendants.
Based on the information in your question, you and your wife would not be eligible for this tax credit.
For more information about the first-time homebuyers tax credit and how the IRS defines a related party visit the following links:
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