By Richard Panick, IRS Media Relations

April 07, 2010, 10:33AM

Question from Mariela

April 6, 2010 at 2:56pm

Richard,

could you elaborate on the exact meaning of "adquiring the home by gift"? Are the young buyers who received a gift from their parents at closing, to help them out with the down payment, disqualified for the tax credit?

Answer: Mariela -  The situation you discribe, a monetary gift to help with closing costs, would not disqualify the buyers from claiming the credit provided all other qualifications are met. This does not mean the home was aquired by gift.

 Generally the definition of a gift for tax purposes is the transfer of property by one individual to another while receiving nothing, or less than full value, in return.