Wow! Incredible stats! Did you ever think this was possible? Housing has historically been the conerstone of the American Dream, it’s been the well from where we drew the funds for college, medical expenses, and so much more. What a tremendous blow it is to find out you owe more than your home is worth!
In course of conducting my business I usually find myself in the not very pleasant situation of breaking the news to the homeowners, who in most cases look at me in either absolute bewilderment or anger. Sadly, there’s not much I as a humble real estate agent can do to ease their pain, I can only provide them with the facts generated by the market, so that they can make an informed decision as to the sale of their property.
Today is probably the worst time to try to sell a home, however if you are in a situation where you must sell, due to a job tranfer, job loss, medical reasons, divorce, etc. There are different avenues we can take to successfully sell your home fast and for top dollar. If this is your case please don’t hesitate to contact me for a professional, no-cost, no-obligation consultation, or visit any of my websites posted on the links section of this blog.
If you are in a must sell situation hesitating and waiting is probably not the best option at this time,even in today’s market, keep in mind that even though homes are begining to move, more homes are coming on the market everyday, with large number of them being distressed sales (Bank Owned and Short Sales) prices are likely to keep going down or at best remain a current levels for a while. If you must sell waiting will only cost you more at the end.
Selling your home in todays market requires a collaborative effort between the homeowner and their real estate agent, communication, feedback and most importantly realistic expectations from all parties involved will determine the success of your home sale.
A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.
WHO IS ELIGIBLE? Any First Time Homebuyer – defined as someone who has not owned in the previous three years. Purchasing new or resale. Must purchase on or after January 1, 2009 and close on or before December 1, 2009. If married both must be First Time Homebuyers. If unmarried joint purchasers –you may allocate the credit to the qualified First Time Buyer – such as in the case of a parent purchasing with a son or daughter.
ARE THERE ANY INCOME LIMITS? $75,000 for Single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for those single taxpayers making over $75,000 and couples making over $150,000 the credit is proportionately reduced as incomes approach $95,000 and $170,000 respectively. So if a couple makes $165,000, the excess amount is used to create a fraction 15,000/20,000 (.75) times the credit amount. 75% or $6,000 of the credit would be disallowed. They would still get a $2,000 credit.
HOW TO CLAIM? Home buyers should complete IRS form 5405 to determine their tax credit amount, and then claim this amount on Line 60 of their 1040 income tax return. No other applications or forms are required. You can either claim on your 2008 return and amend if needed or claim on the 2009 return.
HOW IS THIS DIFFERENT FROM THE 2008 CREDIT? The 2008 tax credit was $7500, was an interest free loan, and had to be re-paid over a 15 year period. The new credit is $8,000, refundable, and does not have to be repaid as long as you live in the home 3 years.
WHAT KIND OF HOMES QUALIFY FOR THE CREDIT? Any home that will be used as primary residence will qualify. This includes single family detached homes, attached homes like town houses and condominiums, manufactured homes, (mobile homes) and houseboats. The definition of a 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.
IF I PURCHASED IN EARLY 2009 AND CLAIMED THE $7500 TAX CREDIT – HOW CAN I CLAIM THE $8000? You can file an amended 2008 return with a 1040X form. Please consult your tax advisor.
WHO CANNOT TAKE THE CREDIT? You cannot take the credit if you buy from a relative unless there is a taxable gain to the seller – i.e., spouse, parent, grandparent, child or grandchild. You stop using your home as your main home. You sell your home before the end of three years. You are a nonresident alien. You have owned a home in the last three years at the time of closing on the new home.
IF I BOUGHT IN 2008 DO I QUALIFY FOR THIS CREDIT? No, but if you purchased between April 8, 2008 and January 1, 2009 you may qualify for the $7500 tax credit.
TAX CREDIT IS REFUNDABLE? WHAT DOES THIS 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. For instance, if you are in a position to get a refund from the government already, you would get the entire tax credit refunded as well. If, however, you had a tax liability of $1,000 owing you would get $8000 less $1,000 owed = $7,000 refunded.
HOME LOCATION? United States and District of Columbia. Vacation homes and rental homes are not eligible. Principal residence defined as where you spend 50% or more of your time.
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 received an $8,000 tax credit would owe nothing to the IRSA 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 tax payer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15% of $8,000) or lowered from $8,000 to $6,800.00
If you have any further questions please don’t hesitate to contact me at Manny@yusrealty.com. Remember this unbelievable program will expire December 1, 2009. With low prices, interest rates and probably the widest array of choices ever buying is the logical choice.
My name is Manny Quiros with Y US Realty. This is my blog where I will be posting informative, up to date articles and information on buying and selling real estate in general and about the communities I work and live in. Specifically, I will be providing information about Haines City, Davenport, Kissimmee, Winter Haven, Clermont, and real estate in surrounding areas.
My ultimate goal for this blog is to serve as an educational resource for learning about the basics of real estate, as a forum that addresses the pressing issues in real estate, a collection tips and guides for my clients and friends, a way to access monthly market updates for the cities I work in, a place to share client success stories, and a platform to present specific properties and real estate opportunities like up and coming Four Corners homes for sale, that are not yet on the market. I would also like to use this platform for our overseas friends that own vacation homes in the area to air their questions, experiences (good or bad) so that we can all benefit from the collective knowledge.
I am always happy to receive to comments, suggestions, and requests no matter how small or large, so please email them to me at Manny@yusrealty.com
