Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In the Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
As Always – This is a Tax Ruling –
Please consult a Tax Accountant for your scenario
We moved to Lake Norman from Cazenovia NY in 2004. One of the highlights of the fall in the Syracuse area is the Lafayette Apple festival. There are rides, tons of crafts, food and the most important things of all....Apple Fritters and Apple Pies.
I have missed the Apple Festival, so we decided to go to the Brushy Mountain Apple Festival in North Wilkesboro this past Saturday. This festival was recommeded to me by some friends and it takes place the first Saturday in October every year.
The ride to get there is very nice and parking was easy. I was amazed at how big it was!! It filled all the main streets of the village and spilled over to the outskirts as well. There were so many people and vendors!
There were tons of crafts and great things to look at and buy. There was lots of food of all kinds We got a funnel cake and an apple dumpling with ice cream and shared them both. No calories in either of those! We alo bought some gifts and a large bag of apples.
Unfortunately, we got there in the early afternoon and all the pies were gone. We asked around and nobody knew of any apple fritters being sold. We did try something new to us....fried pies. They were great, but I still miss those Apple Fritters!
It has been a wonderful summer for boating on Lake Norman! The weather has been fantastic, the lake level has been up, and we have made the most of it!. One of my favorite things to do is go for an evening cruise when most boaters have headed home for the evening. Its peaceful, quiet, and the lake is much calmer. I LOVE the beautiful sunsets and have tried many times to get the perfect picture. I have decided that they are all perfect pictures when they involve sunsets and water! Here are two of my pictures:
If you are interested in the Lake Norman area, please contact me!
Lynda Ramirez
704-806-2492
LRamirez@kw.com
www.LakeNormanRealEstateSite.com
Provided by Tom Taucher of Davidson Mortgage:
First-time homebuyers, defined as those who have not owned a principal residence in the previous three years, who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. This tax credit is easily claimed on the homebuyer’s federal income tax return.Tax Credit Versus Tax Deduction
It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
Phase-out Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
To break down what this phase-out means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Best Regards,
Tom Taucher
Your Personal Mortgage Consultant for Life
Office: (704) 895.8221 ext.306
Toll Free (800) 652.7177
Fax: (704) 895.8661
Cell: (704) 562.1396
P.S. It’s my intention to continue building lifelong relationships one client at a time and remaining your personal mortgage consultant for life. If you know of a friend, coworker, or family member who has a mortgage or refinancing need, be sure to contact me. Your personal referrals are the greatest compliment I can receive.
Please contact me if you have any questions.
Lynda Ramirez
Keller Williams Realty
704-806-2492
This is my favorite time of year in Lake Norman! The birds are back, the daffodils are blooming, the tulips are getting ready to bloom and its getting warmer!
The first sign of spring, besides the warmer temperatures, is the noticeable increase in songbirds. I am an avid bird lover, so I notice this maybe more than most. I just love hearing all the different birds singing and I never tire of it.
The next thing I notice is the trees start to blossom. There seems to be an order in which this happens. I notice the Bradford pears, the dogwoods, the crab apples, the cherries, and the magnolias. They are all just beautiful, but my favorite by far, is the Bradford pears. They look like huge white cotton puffs when they are in full bloom.
I was amazed, after my first winter here, to see this tulip blooming in my yard in February! In February, Upstate NY is still a frozen tundra! I knew I had moved to the right place if I could see blooming tulips in February! I was even more amazed that there were pansies that would bloom all winter!
Because the different species of trees bloom at different times, we have a show that goes on for weeks! I encourage you to visit during spring if you are considering relocating to the Charlotte and Lake Norman area. You too, will fall in love with spring in Lake Norman! Its actually warm enough to get out on Lake Norman and do some boating also! My husband and I went out last Sunday and Monday we took our daughter out during her visit from college.
This is especially hard to believe since a short week and a half ago it looked like this here:
Please contact me if you would like information about buying or selling a home in Lake Norman. I hope to hear from you!
Lynda Ramirez
Keller Williams Realty
704-806-2492
LRamirez@kw.com
I specialize in giving outstanding service to my clients. I service the Lake Norman area including Iredell, Catawba, Lincoln and Mecklenburg counties.
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