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Congress Extends Closing Deadline For Homebuyer Tax Credit

by Mark Rieger, Duke Warner Realty

After a close encounter with the deadline, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline on June 30. The extension applies only to transactions that have approved contracts in place as of April 30, 2010 and have not yet closed. The legislation should create a seamless extension and the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30, 2010 and the date the President signs the bill into law.

More: Homebuyer Tax Credit Extension

 
National Flood Insurance Extended

Also at the last minute, on June 30th the Senate passed the National Flood Insurance Program Extension Act of 2010, which extends flood insurance until September 30, 2010, and will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date the extension is enacted.

More: National Flood Insurance

As always, if you have any questions, or if you or anyone you know needs some professional real estate assistance, please give me a call. I'm here to help.

First Time Homebuyer Tax Credit ** UPDATED Filing Requirements

by Mark Rieger, Duke Warner Realty
Below you will find a recent article from The Washington Post which goes over the updated filing requirements for the first-time homebuyer tax credit. I hope you find this information helpful. Remember the deadline for being able to receive the tax credit has a requirement that you be under a binding contract to purchase a home no later than April 30, 2010 and the deal must be closed no later than June 30, 2010. If not, you will not receive the tax credit.
 
As always, if you have any questions, or if you or someone you knonw is looking to either Buy or Sell real estate in Central Oregon, please don't hesitate to call.
 

IRS clarifies the tax-credit paper chase

Despite back-to-back snowstorms that shut federal offices for days, the Internal Revenue Service issued new guidance last week on the two tax-credit programs that are powering the country's real estate markets -- the $6,500 credit for repeat buyers and the $8,000 first-time-buyer credit.
   


Filing Requirements - http://www.irs.gov/newsroom/article/0,,id=204671,00.html

2009 Tax Return

Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit (see the instructions for help with the form), and a properly executed copy of a settlement statement used to complete the purchase.

  • Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names, property address, sales price and date of purchase.
  • Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties' names, property address, purchase price and date of purchase.
  • Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Note Regarding Signatures: While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Long-Time Residents: The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:

  • Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
  • Property tax records or 
  • Homeowner’s insurance records.

First Time Home Buyer Tax Credit HUD Requirements

by Mark Rieger, Duke Warner Realty

When the law was changed to extend and expand the credit, IRS changed the requirements on the new Form 5405 and the instructions for claiming the tax credit.  The new requirement state that a FINAL Settlement Statement signed by ALL parties must be attached to their personal (1040) tax return. 

* If you have a pending transaction and are planning to obtain this tax credit – please notify your Escrow Officer right away. This will help aid in getting the escrow authorization forms signed through closing (while we transition with this requirement).

IRS Releases New Forms, Instructions

The IRS has released IR-2010-006 providing a revised Form 5405 to reflect the changes to the tax credit made in the extension and expansion legislation enacted in November 2009. The release reminds taxpayers that all tax returns claiming the tax credit must be filed manually (i.e., they cannot utilize the IRS E-File automatic system). The revised form includes a section for those repeat buyers who are eligible to claim the $6500 tax credit. The HUD-1 or evidence of the transaction must be filed with all returns claiming the credit (both the $8000 and $6500 credits). Individuals who claim the repeat buyer credit must also provide evidence that they have owned and used the prior residence for five consecutive years. The instructions indicate that property tax or homeowners insurance records are sufficient for this purpose.

Click here for:

IRS release, instructions, and forms

The Home Buyer Tax Credit

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

As always, if you or anyone you know is looking to either Buy or Sell real estate anywhere in Central Oregon, please let me know.

Update on Tax Credit Extension

by Mark Rieger, Duke Warner Realty

This is some good information for the housing market which might be of interest to you. The final vote should be very soon. Call me should you have any questions.

Thank you,

Mark Rieger, Duke Warner Realty

541-480-7441

Deal struck to expand home-buyer tax credit

By Robert Schroeder, MarketWatch

Last Update: 5:35 PM ET 10/28/09

WASHINGTON (MarketWatch) -- Senators have struck a deal to extend a popular tax credit for home buyers beyond those buying their first house, Senate Majority Leader Harry Reid's office said Wednesday.

Legislators also have agreed to extend the tax credit through the end of April, according to a Reuters report.

An $8,000 credit for first-time home buyers is set to expire at the end of November. Under a compromise reached by senators, the credit would be expanded to those who have lived in their home for five consecutive years, a Reid spokeswoman said.

The credit for repeat buyers would be $6,500.

The credit reportedly would be available for individuals making up to $125,000 a year and couples earning up to $225,000 per year, up from the current income limits of $75,000 and $150,000, respectively.

Reid wants to attach the tax-credit measure to a bill that would extend unemployment benefits.


Robert Schroeder is a reporter for MarketWatch in Washington.

 

More information about Tax Credit for Down Payment program

by Mark Rieger, Duke Warner Realty

First Time Homebuyer Credit

HUD has just announced that detailed guidelines on the federal government's plan to provide short-term loans to borrowers using the First Time Homebuyer Tax Credit is expected to be out shortly but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.

The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit the National Association of Realtors® hosted on May 12 during its 2009 Midyear Legislative Meetings in Washington.

It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.

I will keep you informed regarding the release date of the guidelines as they become available. Call me if you have any questions.

$8,000 Tax Credit as a Downpayment?

by Mark Rieger, Duke Warner Realty

Coming Soon: $8,000 tax credit to be used for down payment at closing!

On Tuesday (May 12, 2009), the Federal Housing Administration (FHA) announced it will allow first-time homebuyers to use the federal tax credit of up to $8,000 for a down payment at closing – for FHA loans.    FHA will allow approved lenders and nonprofits, and state and local government agencies to issue short-term bridge loans buyers can use for down payments.  Buyers would repay the loans after getting their tax refunds.  This could be good news for first time home buyers, which are slated to account for 53% of home purchases in 2009 - but unfortunately, there isn't much we can do until the details of the program are fully released, and in turn accepted by lenders.   I’ll keep you posted!

Remember: FHA already allows the buyer to receive a gift for the down payment (minimum 3.5% down).  Many buyer’s are already taking advantage of this unique feature of FHA by getting a $8,000 gift with plans to repay the gift after closing and after they get the $8,000 tax credit (note: even though gifts don’t need to be repaid – a homeowner can always decide to repay the gift if they wish).

As always, if you have any questions, please don't hesitate to call. If you know of anyone looking to Buy or Sell Real Estate in Central Oregon, I would greatly appreciate your referral. Thanks.

Claim $8,000 Tax Credit This Year?

by Mark Rieger, Duke Warner Realty

Here’s some helpful info on the tax credit options, straight from the IRS: 

First-Time Homebuyers Have Several Options to Maximize New Tax Credit

 

 

 

IR-2009-27, March 18, 2009

Audio Files for Podcasts: English Spanish

WASHINGTON — As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

The filing options to consider are:

  • File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15.  This step would be faster than waiting until next year to claim it on the 2009 tax return.  Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.
  • File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later.  Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.
  • Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.
  • Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

IRS.gov provides more information, including guidance for people who bought their first homes in 2008. To learn more about the overall implementation of the Recovery Act, visit www.Recovery.gov.

Subscribe to IRS Newswire

 

 

More FAQ about the Home Buyer Tax Credit

by Mark Rieger, Duke Warner Realty

Yesterdays blog included the IRS form 5405 regarding the First-Time Homebuyer Credit. Today I discovered an easy to read Q & A report that describes the process in much better detail. Click on this link to get the answers to your remaining questions.

As always, please don't hesitate to contact me if you or anyone you know is looking to Buy or Sell real estate in the Central Oregon area. I'm here to help.

More Info on the First Time Homebuyer Tax Credit

by Mark Rieger, Duke Warner Realty

Hello

The Internal Revenue Service now has available IRS Form 5405 which explains how the recently passed First Time Home Buyer Tax Credit actually works. You can access this information here.

I hope the information helps explain this new program in more detail. Business is definetly picking up as we get closer to Spring. If you have any questions or need any immediate assistance, please don't hesitate to contact me.

Displaying blog entries 1-9 of 9

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