                                           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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