Real Estate Insider
A Publication Of The Group, Inc.
Vol. 34, No. 1
January 2010
Federal Homeowner Tax Credit Deadline is April 30, 2010 In November the Federal Homeowner Tax Credit was expanded and extended. The tax credit was expanded to include both first-time buyers and long-time residents. The income limits were expanded to $125,000 for a single person and $225,000 for a couple. The tax credit was extended. A home must be under contract by April 30, 2010 and closed by June 30, 2010. The tax credit is $8,000 for first-time buyers and $6,500 for long-time residents. A firsttime buyer is defined as someone who has not had an interest in a principal residence for three years prior to purchase. A long-time resident is defined as someone who has used the home sold or being sold as a principal residence consecutively for five of the previous eight years. The seller of the property can be anyone except a direct relative. The buyer cannot be claimed as a dependent on someone else’s tax return. The maximum purchase price of a property is $800,000. The program is designed for primary residences as opposed to investment property. The purchaser should plan on owning the property for at least three years. If the property is sold within three years, the tax credit must be returned. A tax credit differs from a tax deduction. Qualifying purchasers under this program will have a credit toward their income taxes owed. If the income taxes owed are less than the credit, the qualifying purchaser will receive a tax refund. Qualifying purchasers simply needs to include IRS Form 5405 and the settlement statement with their tax return.
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April 30, 2010 Tax Credits Expire Homebuyer e Buyers e to First-Tim $8,000 Availabl e Residents e to Long-Tim $6,500 Availabl
Credit Kits Homebuyer Tax e. Contact bl la ai av w are no tor® to your Group Real . py co receive your
Of course prospective buyers should seek the advice of a CPA to discuss the particulars of their own situation. The Group has just produced a Homebuyer Tax Credit Kit which includes everything a prospective buyer or seller needs to know about this program. Complimentary copies are available from your Group REALTOR®.
If you know someone who would like to receive this newsletter, please call me. Harmony Office 970.229.0700 2803 E. Harmony Road, Fort Collins, CO 80528 Horsetooth Office 970.223.0700 Mulberry Office 970.221.0700
Greeley Office 970.392.0700 Loveland Office 970.663.0700
Centerra Office 970.613.0700
www.thegroupinc.com
Return Service Requested
Showing History of Group Listings
New tax credit rules
Limitation on Cost of Purchased Home
$800,000
Purchase by a Dependent
Ineligible
Anti-fraud Rule
Purchaser must attach documentation of purchase to tax return
500-525
$125,000 – single $225,000 – married Additional $20,000 phase out
475-500
Income Limits
450-475
So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 2010 to close
66 29
425-450
Binding Contract Rule
65
400-425
Purchases after April 30, 2010
178
60
375-400
Termination of Credit
184 139
350-375
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
214 170
325-350
Long-Time Resident – Definition for Eligibility
272 266
300-325
November 7, 2009
271
275-300
Effective Date – Current Owner
355 353
250-275
$6,500 ($3,250 married filing separate)
405
225-250
Current Homeowner – Amount of Credit
428
200-225
May not have had an interest in a principal residence for 3 years prior to purchase
175-200
First-time Buyer – Definition for Eligibility
525
150-175
First-Time Buyer – Amount of Credit
$8,000 ($4,000 married filing separate)
November 1, 2009 through December 31, 2009
125-150
Rules As Enacted November 2009
100-125
FEATURE
PRSRT STD U.S. POSTAGE PAID FORT COLLINS, CO PERMIT NO. 304
Tax credits creating new homebuyers The Wall Street Journal reported that extraordinary government efforts to stabilize the housing market are paying off. Sales of previously occupied homes surged in November to the highest level in nearly three years, spurred by federal subsidies for starter homes and a massive Federal Reserve push to drive down mortgage rates. MoodysEconomy.com chief economist, Mark Zandi, estimates nearly 400,000 new and existing home sales are attributable to the first-time home buyer tax credit. The pace of home sales is up 46 percent from its bottom in January according to data released Tuesday by the National Association of Realtors®. Here in our local market we notice substantial showing activity in the $150,000 to $450,000 price range. By tracking the number of buyers viewing all of our listings we are able to estimate future sales. It appears that sellers in this ‘mid-range’ price should experience activity in the first quarter of 2010.
Homebuyer Tax Credit Kits are now available, contact your Group REALTOR® to receive your copy.