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IRS Allows For Non Signed HUD-1 Statements When Claiming Homebuyer Tax Credit
Posted on February 28, 2010
Seattle Real Estate Tax Credit Guidelines: The IRS does allow for non signed HUD-1 statements to be attached to your tax return when claiming the home buyer tax credit if......
Yes, there is an if. - If it is customary in your locale for them not to be signed. In Seattle, buyers and sellers sign the estimated HUD at escrow with all other loan docs for purchasing the home, but the final HUD statements are mailed out to everyone after closing of the real estate purchase. These statements are stamped with the official escrow signature to indicate that they are indeed the final HUD-1 statement, but no other signatures from buyer or seller are on the final HUD in our jurisdiction.
The question does keep coming up: I got this call all last week from Seattle real estate clients who did take advantage of the tax credit opportunity out there when buying their home. It was very frustrating for them because IRS form 5405 so clearly indicates that a signed final HUD-1 is required. I wanted to put some IRS info up to help clarify the process. Obviously, I am not a tax accountant, and you should seek your tax professional's advice, but here are the exact recommendations from the IRS ( I have highlighted a few choice sections):
"Q. What do I have to attach to my 2009 or 2010 return to prove that I bought a new home in order to claim the credit?
A. If you claim the credit on a 2009 (or later) return, you must attach a copy of your settlement statement. For most homebuyers, this will be a properly executed Form HUD-1, Settlement Statement (U.S. Department of Housing and Urban Development) that includes:
- Names and signatures (if available) of all parties involved,
- Property address,
- Purchase price, and
- Date of purchase."
"Q. What do I do if my settlement sheet does not have any signatures?
A. The IRS encourages buyers seeking the homebuyer credit to sign the settlement statement when they file their tax return -- even in cases where the settlement form does not include a signature line. The IRS recognizes that elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of both the buyer and seller. While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS has clarified that it will accept a settlement statement if it is complete and valid according to local law. In areas where signatures are not required on the settlement document, the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return. In situations where the signature of the seller is not on the settlement document, the IRS advises the buyer to still sign the document."
So according to the IRS in regards to claiming your homebuyer credit, they would like you to go ahead and sign your HUD-1 when you attach it, but they don't require you to do so as their form 5405 so clearly asks you to do. Hope that helps!
Seattle, there is still time to take advantage of the homebuyer credit - let us know if you need help finding a home or want more details on the program or others out there: realestate@cooperjacobs.com
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