Gulf Shores, AL

<P>The Dunes is a quaint, family-oriented beach subdivision in Fort Morgan (Gulf Shores) Alabama. The neighborhood sits almost at the end of Fort Morgan Road, near the actual Fort</P>

<P>It is a wonderful spot for history buffs and nature lovers. The neighborhood is adjacent to miles of undeveloped beachfront property owned by the State of Alabama where guests can walk and explore real war bunkers as well as beautiful, undisturbed beachfront property. Also located at the Fort is the Mobile Bay Ferry which runs regularly back and forth to Dauphin Island. It is an excellent day trip and a convenient way to travel back to Mobile Alabama.</P>

<P>The Dunes features a private beach boardwalk and a community pool. The community pool has a cabana as well as a huge hot tub. The Dunes shares amenities with the Dunes condominiums which has another pool and indoor pool as well as a fitness center. </P>

<P>Do you like to boat? The Dunes is across the street from the Gulf Shores Yacht Club, formerly known as the Fort Morgan Marina. There is plenty of space to park your boat at the Dunes beach house for rent by Prickett Properties and you can launch across the street.</P>

<P>Prickett Properties has a 8 bedroom beach house located within the Dunes for rent named Sandy Feat. Sandy Feat is a unique design in that it is actually a duplex with four bedrooms and 3 baths per side. The living areas of Sandy Feat are able to open up to one another to make the house feel like one large home with the added bonus of two kitchens, two master suites and two laundry areas.</P>

<P>You can view and book Sandy Feat at www.GoToTheGulfCoast.com or click below</P>

Sandy Feat Side A

Sandy Feat Side B

Information provided by the Alabama Association of Realtors, posted by Tinsley Myrick of RE/MAX of Orange Beach on March 6, 2009.

What is it?

The Alabama Legislature has enacted a new law (§40-18-86 Code of Alabama) that requires Buyers to withhold 3% of the purchase price or consideration paid for the sale or transfer of real estate by non-resident individuals and 4% for sales by nonresident corporations, partnerships, or unincorporated associations of the State of Alabama. THE ACT APPLIES TO THE SALE OF ALABAMA REAL PROPERTY BY A SELLER WHO IS A NONRESIDENT OF THE STATE OF ALABAMA.

Why is it being withheld?

The money is required to be withheld by the Buyer in order to collect the capital gains tax owed by a nonresident seller to the State of Alabama.

Is this a new Tax?

NO. This is not a new tax but rather a new collection mechanism (§40-18-86 Code of Alabama) approved by the Alabama Legislature, to collect capital gains taxes owed on the sale of real property.

When does it take effect?

The collection mechanism law will go into effect on August 1^st, 2008 on all transfers or sales.

Are real property sales subject to taxes?

Yes, in many cases. All capital gains are subject to taxation; however, there are a number of exemptions to the law including sales involving a primary residence and the current sales price thresholds. (See below)

What are the sales price thresholds?

AUGUST 1, 2008 THROUGH DECEMBER 31, 2008

Sales by nonresidents of $800,000.00 and above are subject to the withholding requirement.

JANUARY 1, 2009 AND THEREAFTER

Sales by nonresidents of $300,000.00 and above will be subject to the withholding requirement.

Who is liable in collection of tax owed?

· Under the law the buyer is liable for the capital gains tax owed by the seller if the tax is NOT withheld and timely remitted to the Department of Revenue after the sale or transfer of the real property.

· The Alabama Department of Revenue has adopted interim guidelines, procedures, and forms for the enforcement of the collection of the capital gains tax on nonresident sales.

· Typically the closing attorneys, agents and title companies will handle the actual collection and remit to the Department of Revenue.

How does this affect sellers?

Nonresident individuals will have 3% of the purchase price or consideration paid withheld unless they execute a Department of Revenue Sellers's Certificate of Exemption, Affidavit of Seller's Residence or Affidavit of Seller's Gain. Forms will be available through the Department of Revenue's website at www.revenue.alabama.gov. (click on What's New)

Nonresident corporations, partnerships, or unincorporated associations of the State of Alabama will be subject to the 4% withholding criteria.

§40-18-86 Code of Alabama states: "Any Seller or transferor who meets all of the following conditions and who provides the buyer or transferee with an affidavit signed under oath swearing or affirming that all of the conditions are met will be deemed a resident for the purposes of this section:

1. The seller or transferor has filed Alabama income tax returns or appropriate extensions have been received for the two income tax years immediately preceding the year of sale.

2. The seller or transferor is in business in Alabama and will continue substantially the same business in Alabama after the sale or the seller or transferor has real property remaining in the state at the time of closing of equal or greater value than the withholding tax liability as measured by the 100 percent property tax assessment of such remaining property.

3. The seller or transferor will report the sale on an Alabama income tax return for the current year and file it by the due date.

4. If the seller or transferor is a corporation or limited partnership, it is registered to do business in Alabama."

Do the seller's ever get this withheld tax back?

When seller's file their tax returns their accounting professionals will determine the course of action.

How does this affect buyers?

Under the law the buyer is liable for the capital gains tax owed by the seller if the tax is NOT withheld and timely remitted to the Department of Revenue after the sale or transfer of the real property.

Are there any exemptions from the withholding law?

Yes. There are a number of exemptions to the law including sales involving primary residences. SEE SELLER CERTIFICATE OF EXEMPTION www.revenue.alabama.gov.

Why is this important?

· Nonresident sellers need to be aware of the exemptions and that a percentage will be withheld. This will obviously affect those who may need to close on another property immediately.

· Buyers need to be made aware that this is their responsibility so they are prepared at closing.

Do other states have these requirements?

YES. Approximately 14 states have similar statues and guidelines.

Who has authority over the guidelines and implementation?

Department of Revenue www.revenue.alabama.gov

Where can I read the entire Law and get further information as it is available?

AAR will continue to provide updates as information becomes available through the Department of Revenue website at www.revenue.alabama.gov.

This notice is provided for informational purposes only as a benefit to members of the Alabama Association of REALTORS®. This information is not given as legal advice. Buyers and Sellers are urged to contact closing attorneys, closing agents and/or title companies.

This article was sent to me by Karen Way of Clear Title in Gulf Shores on March 3, 2009. If you want a smooth closing, close with Karen!

Programs offer help to prevent foreclosure

Sunday, March 01, 2009 By KATHY JUMPER Real Estate Editor

Help is on the way for homeowners facing foreclosure, starting Wednesday.

The $75 billion federal Homeowner Affordability and Stability Plan is aimed at helping families restructure or refinance mortgages to avoid losing their homes. The plan also gives lenders incentives to modify mortgages for struggling homeowners, in turn reducing the foreclosure inventory.

"I'm very hopeful and optimistic that this will work," Sandra Dunaway, director of Consumer Credit Counseling Service of Mobile, said last week. She said her office is seeing 40 to 50 homeowners a month for foreclosure prevention help.

"I'm hoping that consumers will come to us first," Dunaway said. "We don't want them to set themselves up to fail. We will do a budget for them, look at their assets and set up a realistic plan for this particular family right now." Consumer Credit Counseling works directly with lenders to help families through the process, she added.

Consumers can begin applying for the mortgage relief Wednesday, according to the federal plan.

There are two programs that offer help, according Dunaway.

No. 1: Homeowners current with their mortgage but who owe more on the house than its current worth can refinance. The government has provided incentives to lenders - for every dollar lost by reducing the interest rate, the government will pay the lender a dollar. And there is an incentive for homeowners - if the borrower stays in the house, the government will pay $1,000 toward the principal balance each year for up to five years, she said.

No. 2: Those struggling to make their mortgage payments or already delinquent may be eligible for a loan modification, she said. The same incentives are available for lenders and borrowers under this program.

There are no guidelines that dictate a specific reduction in rates or payments, according to Dunaway, who added, "With the rash of foreclosures, I'm thinking that the lenders are going to get on board with this."

Local lenders seemed to agree.

"No bank wants to foreclose," said Glynis Hyde, a vice president at Regions Bank. "We're not in the rental or selling business." Regions a year ago implemented its own mortgage payment hardship program to help customers find different strategies to prevent foreclosure, she said.

Banks don't want the real estate, said Karen Sullivan of BankTrust in Mobile. "That's not what's profitable for us. We try to work with the customer - some payment is better than no payment."

The foreclosure bill is geared for individuals in crisis, not for investors who bought to flip, according to Sullivan. Still, she said there are ways to restructure even those mortgages to help investors.

For more information, go to www.financialstability.gov or www.recovery.gov.