Expanded & Extended Home Buyer Tax Credit

It's not just for first time home buyers anymore. Experienced home buyers now qualify too.

General Rules:

• A "first time home buyer" is defined as someone who has not owned a primary home in the last three years. If you are a "first-time home buyer", your tax credit will amount to 10% of the purchase price of your new home not to exceed $8,000.
• A "long-time resident" is defined as someone who has lived in the same primary home for 5 out of the past 8 years. If you are a "long-time resident", your tax credit will amount to 10% of the purchase price of your new home not to exceed $6,500.
• The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling it
• The home must be purchased for less than $800,000 before May 1, 2010. If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit
• You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces, and others
• If you are married, both spouses must qualify for the credit
• If more than one unmarried individual is buying the property, the credit can be split up among all the individuals who qualify. However, the total credit taken cannot exceed $8,000 (or $6,500 for "long-time residents"). Alternatively, if only one of the unmarried buyers qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit.
• The credit applies even if you have co-signers on your mortgage loan
• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence - you could live in one unit and rent out the others

How does the tax credit work? A tax credit is kind of like a gift certificate that you can use to pay your taxes - it reduces your income tax bill on a dollar for dollar basis. Imagine paying your bill at IRS Restaurant, and then later getting an IRS Restaurant gift certificate. Normally, you would need to go back to IRS Restaurant and buy more food in order to use your new gift certificate. But what if IRS Restaurant allowed you to just turn in your gift certificate for cash? That's how the home buyer tax credit works! All you need to do is file a form with the IRS after you buy your new home and they will send you a refund check for $8,000 (or $6,500) - just like the example of IRS Restaurant that allows you to exchange your gift certificate for cash! Remember though, you'll receive the $8,000 (or $6,500) from the IRS AFTER you purchase your new home, so you cannot use the funds to help with your down payment. For more information about the home buyer tax credit or other recent updates to the mortgage and real estate markets, just give me a call. I would be happy to assist you with your mortgage in the purchase of your new home!

* Home Buyer Tax Credit PDF

* First Time Home Buyer Tax Credit PDF

To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another person any transaction or matter addressed in this communication. I recommend that you consult with properly licensed legal, tax and investment advisors for specific advice pertaining to your individual situation.

Realtors - is Social Networking part of your 2010 Business Plan?

It should be!  I am hosting a Social Media and Networking Seminar for Realtor’s featuring industry pro Jerry Kidd.  Spend 45 minutes of your busy day with Jerry to learn how to integrate social networking into your real estate business.  You’ll get a great overview on why social media and social networking istailor-made for real estate agents. You’ll learn what it is, who’s using it, why it’s important and how to go about learning how to use it effectively in your practice.

• When: Thursday November 19th, 2009
• Time: 9:30-10:30am (optional networking after)
• Location: Fort Mason, Gatehouse, San Francisco, CA. (MAP)

Seating is limited so RSVP now to events@ownrealestateright.com or 415.425.0857.  You can also RSVP to me on Facebook, Linked In, or Twitter.

Bonus: Receive a $25.00 discount on NARs ePro Course and receive information on the all-new NAR Social Media course!

About the host:  Jana Lane is a Certified Mortgage Advisor. Her company is Own Real Estate Right in affiliation with O’Donnell Financial Group. 

Featuring: Jerry Kidd, GRI, CRS, CRB, etc. Jerry is a 23-year veteran of the real estate industry and author of the popular blog RealtyTechBytes which focuses on technology tools for real estate agents and how to use them.  Jerry is the owner of Jerry Kidd Training and Consulting Company specializing in training real estate agents and lenders how to use today’s technology tools to grow and sustain their businesses.

Are you comfortable referring a friend to someone you've done business with?

Is it in your nature to refer your friends, family or associates to professionals that you have worked with recently or in the past? I believe that it is simply in some people’s nature to refer, and for other people, it's not. This blog post sheds more light on the subject. It's a two-minute read, and as a professional person who strives to earn referrals, I found it a good reminder and well worth the read! I hope that you will find value in it as well.

Read Bill Good's "Secret to Real Referrals" here.

Please let me know your thoughts.

-Jana

Relief for Homeowners with Jumbo Mortgages

Not quite the relief that I am looking for - but it's a start.

Even though the availability for jumbo loans isn't what it once was, the IRS has apparently decided to give a break to jumbo mortgage holders. More specifically, Forbes reports that the IRS has concluded that a taxpayer can deduct interest on the first $1.1 million of a home mortgage - which is $100k more than an earlier limit. Previously (or currently depending on when this goes into effect) interest on up to a 1m purchase, money borrowed, plus $100k equity borrowed, could be deducted. Either way you slice it, you can deduct interest on an extra $100k borrowed and that's not a bad thing - IF you qualify for the deduction.

On top of that, taxpayers can file amended returns for the past three years and claim thousands in refunds. Yippee! 

I think that's just mean... Oct 15th just passed (last date to file extended returns - I filed 10/13) and my tax preparer was just about to relax... Not so fast :-)