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First Time Home Buyer Tax Credit Begins Final Countdown

By: Rob Jordan

The tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence is in it’s final stages. The tax credit applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. So buyers need to be IN ESCROW by the end of April, and CLOSE by end of June.

Here are some common questions and answers regarding the tax credit. (Information obtained from Federal Government website.)

1. Who is eligible to claim the $8,000 tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit.
2. What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.
3. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4. Are there any income limits for claiming the tax credit?
Yes. For sales occurring after November 6, 2009, the income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return.
5. How do I claim the tax credit? Do I need to complete a form or application? Are there documentation requirements?
You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). Please note that although the Form is titled “First-Time Homebuyer Credit,” this is the correct form for claiming both the $8,000 first-time homebuyer tax credit and $6,500 repeat buyer tax credit.
No other applications are required, and no pre-approval is necessary.
6. What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
It is important to note that you cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members.
7.  I read that the tax credit is “refundable.” What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
8.  Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April, 30, 2010).
9.  Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
10.  Is there a way for a home buyer to access the money allocatable to the credit sooner than waiting to file their 2009 or 2010 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy.

Tags: Agoura Hills Homes for sale, first time home buyer, Rob Jordan, Tax Credit

Short Sales in the Conejo Valley

Short Sales Just Became Easier at Wells Fargo, Wachovia, World Savings

By: Rob Jordan

Short sales, where the homeowner owes more than the home is worth, constitute a large percentage of home sales these days. Short sales have a reputation as being long, difficult, stressful transactions for sellers, buyers and real estate agents. But that’s all changing for homeowners with loans from Wells Farto (and Wachovia and World Savings, which merged with Wells Fargo previously.) Wells has established a single, responsive, local loan officer who deals exclusively with short sale transactions. Here are 2 big positive changes. 1) If you’re a homeowner who desires a short sale, Wells will give a YES or NO response to your request within 72 hours!  This is fantastic! Typically you have had to wait weeks and sometimes months to even get started with your lender. 2) Once the process starts, Wells is committed to concluding the transaction in 30 days. Are you kidding me? Short sales typically take 3 or 6 or 9 months!

So if you’re a homeowner with a Wells Fargo, Washovia, or World Savings loan and you’re facing a short sale, your life just became a lot easier and less stressful. For additional information, contact Rob Jordan at 818.237.4425.

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy. Rob Jordan Real Estate Agent, Ewing and Associates specializing in Agoura Hills Homes for sale.

Tags: Agoura Hills Homes for sale, ewing and associates, Rob Jordan Real Estate Agent, Short Sales in the Conejo Valley

Westlake Dog Saved from Coyote

English Bull dog not meant to die

By: Lisa Stanley

Another miracle on the vicious Westlake Village front.  After hearing a “strange” noise, Jamie Andrew of Westlake Village began approaching the commotion.  What she saw was rather unpleasant.  3 ravenous coyotes were choking an English bull dog and dragging the dog up the hillside.  With a little craft in the form of waving her hand, Andrews scared away the coyotes and the dog was uninjured.

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy. Lisa Stanley Real Estate Agent Sotheby’s.  Agoura Hills Homes for sale.

Tags: Agoura Hills Homes for sale, Coyote attacks dog, english bull dog, ewing sothebys, Lisa Stanley Real Estate Agent, Westlake Dog saved

Agoura Homecoming 2009

Congrats to this years homecoming winners

By: Rob Jordan

Agoura High School Homecoming Queen Dani London and King Garrett Rosenblum celebrate an indelible moment during the halftime show at Charger Stadium last Friday.

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy.

Tags: Agoura Hills Homes for sale, ewing and sotheby's, Ewing Sir, ewingsir, Old Agoura Homes for sale, sotheby's