Group One | Ti Smack

News & Events

New $6,500 Long-Time Homeowner Tax Credit

Thursday, November 12, 2009

New $6,500 refundable credit for long-time homeowners buying a replacement principal residence. As part of the new legislation the Worker, Homeownership and Business Assistance Act of 2009 was signed into law on Nov. 6, 2009.

Similar to the first time home buyer credit, the buyer must have a signed purchase and sale agreement in effect by April 30, 2010 and the buyer has until June 30, 2010 to close. The refundable credit is worth a maximum of $6,500 or 10% of the homes purchase price. To qualify buyers must have owned and lived in a home for five consecutive years out of the last eight and the new principle residence being purchased must be less than $800,000.

Income restrictions for the $6,500 credit: Buyers must make less than $125,000 modified adjusted gross income for singles, or $225,000 modified adjusted gross income for couples (higher-income buyers may receive a partial credit if below $145,000 for singles and $245,000 for couples).

Buyers apply for the refundable credit on their tax return and are required to attach a copy of the settlement statement. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

$8,000 First-Time Homeowner Tax Credit - Extended

Thursday, November 12, 2009

The refundable $8,000 tax credit for first-time buyers was expiring November 30, 2009. The credit was extended by the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009.

Now to qualify for the credit, the buyer must have a signed purchase and sale agreement in effect by April 30, 2010 and the buyer has until June 30, 2010 to close. Buyers must be over be over 18 and not claimed as a dependent. Buyers may not have owned a home for the past 3 years to qualify as a first-time buyer. They must also live in the new home for at least three years, or they will be obligated to pay back the credit.

The income restrictions have also been increased: To qualify, buyers must now make less than $125,000 modified adjusted gross income for singles, or $225,000 modified adjusted gross income for couples (higher-income buyers may receive a partial credit if below $145,000 for singles and $245,000 for couples).

Applying for the credit is still easy… you are now required to attach a copy of the settlement statement to your tax return. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

2009 Market Update

Thursday, November 12, 2009

Ada County:

For the thid quarter of 2009, the number of homes sold was up 9.99% compared to the same period last year, but the average sales price was down -18.89% for the same period. The resale of existing homes accounted for 81% of sales and new construction accounted for 19% of sales. In Ada County, 65% of sales came from homes that sold below $200,000, 31% of sales came from homes that sold between $200,000-$400,000, and 4% of sales came from homes priced over $400,000.

Canyon County:

For the third quarter of 2009, the number of homes sold was up 21.88% compared to the same period last year, but the average sales price was down -21.91% for the same period. The resale of existing homes accounted for 86.5% of sales and new construction accounted for 13.5% of sales. In Canyon County, 95.86% of sales came from homes that sold below $200,000, 4% of sales came from homes that sold between $200,000-$400,000, and 0.14% of sales came from homes priced over $400,000.

The Tax Benefits of Owning a Home

Monday, August 24, 2009

The tax benefits of owning a home are often misunderstood, and it’s easy to understand why. The current tax code can be very difficult to understand. Let me simplify the tax benefits of owning a home:

1. Interest paid on your home’s mortgage is deductible up to $1million of home mortgage debt.

2. Interest paid on a home equity loan is deductible up to $100,000 of home equity debt.

3. Property taxes are deductible.

4. Mortgage Insurance Premium for homes purchased between 2007-2010 is deductible (subject to $100,000 adjusted gross income limitation).

5. Points paid to reduce the interest rate of your mortgage are also deductible (note: if you pay points as part of refinance the points must be deducted over the life of the new loan unless the refinance involves improvements to your home).

Tax Planning Tip: These 5 deductions are itemized deductions and are claimed on Schedule A of your tax return. You must itemize your return to receive the benefit. If you are subject to the alternative minimum tax “AMT” you may not receive the tax deduction for some of these items.