Christopher Olsen

When it comes to home ownership, I am like a cheerleader…without the shorts and pom-poms (sorry for the disturbing image).

There was an ad for a bank years ago and it shows a couple moving into their house and the man is doing the Chuck Berry move…hopping along on one foot, with the other foot kicking in the air, while holding a large floor lamp like it’s a guitar. I tell buyers about that ad and tell them, even after more than a dozen years as a homeowner myself, I feel that way about my home…every…single…day!

I could write a book about all the things I LOVE about owning a home with my beloved, Robin and our four cats and pet rabbit…and trust me when I say; by the time I was done…it would be thicker than Tolstoy’s War & Peace.

“Peace” is the keyword here. There’s a sense of peacefulness living here. I’m totally serious when I tell you that quite often I say aloud when I’m at home: “I love this place.”

One of the sources of “peace” outside of our home is having good neighbors. Having good neighbors requires one thing…and one thing only…being a good neighbor yourself. I could tell you that once in a while I grab the big plastic trash barrel and blue plastic recycling bin of my neighbors and put them up by his backdoor. Another neighbor, living at a home I have listed…had the leaves in front of his house gathered up courtesy of my electric leaf blower…it’s amazing how far I can get when I plug it in to two, 100 foot heavy duty extension cords…um…that would be 200 feet from the backdoor.

Another neighbor while their mower was broken down, had their lawn cut by yours truly as I wasn’t going to let their son use it to play “find the cultch” in their lawn with our mower. It was memorable too as that was the summer I kept having the chest pains and after a tongue lashing from a dear friend and mortgage broker, I went to have my treadmill stress test a week early. Good thing too…99-percent blockage and three stents in my coronary artery later…I was even more grateful to be home and to be back with my wife, pets and great neighbors.

One time I got so carried away with the used snow blower we bought, I went across the street to the rental house and did their driveway… (it was the first year we had the snow blower…it makes a LOT of noise…and it’s FUN to use…and the excess noise makes it all the more enjoyable) and then realized, “Oh crud! They have someone who plows…and the plow dude won’t be too happy!” Thankfully, Mother Nature kept the snow coming after I cleared the driveway and left more of the poor-man’s fertilizer for the plow dude to clear off the driveway…like they said in the Big Lebowski…The Dude Abides!

The snow blower, when it was first dropped off…posed a conundrum…a dilemma…okay…A place to park that puppy! The house closest to us, was being rented out by the same guy (Mark) whose trash barrel and recycling bin often found their way home from the sidewalk courtesy of the Norwegian Shorthaired Retriever.

To start, he offered to let us stow it in his garage. The owner of the house who rented it to Mark was fine with it. Then one day, in one of the warmer months. I noticed the garage had been renovated a bit. Then shortly after that, the back of that same garage sprouted a narrow, covered deck…and said deck had this sturdy wooden ramp coming down on our side of the garage. It was the new home for our snow blower! Mark had even gone so far as to add an outdoor outlet and a cord…so I could prime, open the throttle and adjust the choke…plug in the cord…hit the button and VROOOOM…off to show those flakes whose boss.

It gets even better! One winter, the snow was heavy and slid off the garage roof and the tires of the snow blower…my MAN-MACHINE spun helplessly in the deep wet snow. It took a lot of shoveling and Yosemite Sam style cussing to get it free and out to the driveway.

I put the machine away after the driveway was cleared and we got even more snow and I wasn’t looking forward to another wrestling match through the deep snow that slipped off the garage roof. I was surprised though to find that the path to the back of the garage was already cleared…Mark had come along with his machine and cleared out the path!

This past season, Mark’s machine was in need of repair and I was more than happy to loan him ours.

That Mark and the previous neighbor, (also named Mark) always shovel out our fill-pipe for our heating oil so when the truck shows up to fill-er-up…there’s no digging, slipping, sliding or any Yosemite Sam language.

Other neighbors behind our house are known for their Yosemite Sam language. They’re a bit loud but good people. It took a while to realize why they were so loud, was because the head of the house, is hard of hearing.

Well, this past summer, I went out to the shed out back to grab the lawnmower. I saw something next to the shed that no one likes to see. “Irene” the large storm has brought heavy rain and some stiff winds, even up as far as Bangor…and as a result had caused the very tall tree by the shed to shift and lean…it’s root-ball was lifting up through the lawn.

As if that wasn’t bad enough…it was leaning…aimed right at our neighbors new, $8,000 all metal garage…which I later found out, hadn’t been insured yet. Instead of letting it continue to lean and go “SPLAT!” on the garage and paying the insurance deductible…and risking causing a rift with the neighbors…I went over to let the homeowner know.

He was very happy to be told. Reason one…he hadn’t insured the garage yet…and even though I was covered for a “SPLAT”, there was far too much risk of someone getting hurt and even if insurance covers replacement of crushed garages and the recreational vehicles inside…it’s no fun for anyone.

The tree which we thought was a big honkin’ Ash was in fact a Box Elder. We have a great Tree Dude who knows the science of trees as well as how to climb them with a chainsaw in hand, tethered to his belt.

Long story short…even though the Box Elder tree was on OUR side of the property line…our neighbor was so happy to be forewarned of the impending “SPLAT”…he OFFERED…(I did not have to ask) to pay for HALF of the cost to take the tree down. In addition, he and his son and friends actually came over to our side of the line and cut up the massive tree trunk and split the wood and took it off our hands.

We kept some large sections and my wife’s older brother who’s become a skilled wood turner, took some of the wood to make something nice for us, as a memory of the mighty tree that once provided shade for us and a playground and habitat for many furred and feathered friends…who enjoy the benefit of 10 or more feeders and a bowl of peanuts in the shell on the back deck.

It’s nice to have wildlife as neighbors too. It also took some time to realize that our yard was a regular stop on a migration path for a large number of birds. In addition to the birds, we have had groundhogs, who come and go and usually hang out under the shed and oddly enough, never mess with our many plants…having apples on the ground and two large raspberry patches helps. Coming down our street one day, I saw one boogying across the street at a rate of speed that would dazzle the Roadrunner AND Wiley E. Coyote! I drove slowly, looking down each driveway and getting to ours…there he or she was and then “WHOOSH!” back under the shed!

This past summer, in addition to the occasional skunk…(One went KA-PIFF! right next to the house…and YES it took a while to air out the house) we also had some four-legged night marauding bandits…I even had photographic evidence…YES! Raccoons!

The first time we spotted one here was very coincidental…We had just come back from a funeral inRockland. It was for my wife’s wonderful Uncle…Uncle Junior. One of the many cool things about “Junior” was the fact that as an adult, he adopted a wild raccoon. That evening, Robin turned on the light to the back deck and yelled up stairs to “Look outside!” Looking out from our upstairs bedroom window and there was our first furry masked bandit, helping himself to birdseed from the feeder hanging on the tall shepherd’s hook.

The “couple” who came by this summer were less shy and I managed to step out of the deck with the good camera and flash and got some great candids.

So I guess what I’m trying to say…Homeownership can’t be beat! Many times lately, I’ve met people, including some buyers, who are finding it less expensive to own than it is to rent…there are so many advantages…including having great neighbors…and being a great neighbor yourself.

written by Christopher K. Olsen, Happy Homeowner and Broker, Prudential Northeast Properties, Bangor, Maine

You may have a Great Landlord...But No Equity...Why are you still renting?

Recently the National Association of Realtors ran an ad campaign, with a TV ad showing a couple with their kids, literally "sitting on a fence" looking lovingly at a house...A house that COULD be THEIR home!

I was in broadcasting for over 12 years and TV production was a blast! That ad, if you'll pardon the pun...Really Hits Home! It's simple, to the point and subtle without a pitchman yelling at you!

Having rented in Bath, Maine, Gardiner, Maine and for 13 years in Bangor, Maine...I can tell you right now...I had some GREAT landlords! I watched as one ran electricity on a heavy-duty extension cord from the basement to the apartment of a wheel-chair bound neighbor because the power company shut off his electricity. I had a landlord in Bangor that when times were tight, would tell his administrator to lay off sending letters threatening an additional fee on late rent payments for people who were having a hard time making the initial rent and were running a little bit behind.

We had a great landlord who, when I told him we had a pair of pet rabbits, he asked "Are they in cages" and when I said "yes" he said, "Don't worry about the pet deposit."

In that same apartment, Lake Superior started to form downstairs when a hot water tank sprung a leak on a SUNDAY! The maintenance man whose name shall remain, Ken Tyler (the best in the business) asked if we wanted him to replace it right then or first thing the next day (Monday morning) I asked if he could do it right away, and he did! I have this thing about taking a shower before I go out in public, so it was nice to be able to do that Monday morning, rather than call in as "un-bathed."

Now, here's the thing, I love people and even though I had awesome landlords and the best maintenance people over the years...there was one thing missing...that's a not-so-little thing called "Equity."

The last place we lived in gave us our security deposit back, but we had little else but our belongings, rabbit and cats to show for the thirteen years. For those of you who like doing math, I once sat down and found that over that time, we had paid out over $60,000 in rent alone!

NOW...Here is one of the s the many great things about the process of finding and buying a home...

YOU get to choose who you work with, whether it's a real estate agent, your lender, your home inspector, etc. and so on. YOU get to choose! Doesn't that sound nice? In other words, rather than paying a rent and getting what you're given...You're given a choice of who to work with and what you'll get...and even the way you'll pay for it!

Now...Moving in and living in a place YOU OWN is the icing on the cake...Especially when you consider there's a very good chance your house payment has insurance and taxes "built in" to the payment...and the monthly payment, if you've done your math...is an amount you can AFFORD and in many cases nowadays is...get this...Cheaper than what you may have been paying for monthly rent!

Once upon a time there was a TV ad showing a couple who had bought their own place. The man was doing the Chuck Berry move, going across the floor on one foot, holding a large lamp as if it was a guitar while their stereo was cranked up! Guess what? Getting into your own place...You can get that feeling too...and from someone who's been there...that feeling can last a long time...drive by our place sometime when I'm going dishes with the stereo going or working in the yard...with my headphones on and you'll see firsthand what I mean!

Owning your own place also leads to greater self-esteem...as you can make your home, yard and yes, even gardens a labor of love...something you'll be proud to point at and say "WE did that!"

Every year, we have people walking by compliment our gardens and our lawn. I always give credit where credit is due...I always let them know, "I'm ‘lawn'....Robin's ‘garden!' " Here's a little secret for you too...digging holes for things like rosebushes is fun...AND...the more gardens you have...the LESS lawn you'll have to mow!

So...consider getting off that fence and know that there are people like you out there who are ready, willing and able to assist you in getting your own place and a part of the American Dream...Besides...sitting on that fence too long can leave splinters!

Christopher Olsen

Prudential Northeast Properties

Bangor, Maine

Happiest of Holidays to One and All!

Anyone who I've represented as a first time home buyer knows the story I've told countless times to so many people.

The feeling of owning a home is something so strong and spiritual, especially if you rented for as long as my beloved Wife, Robin and I did. Don't get me wrong, we had a fantastic landlord who was always there to address any repair issues, didn't mind the driftwood and planters outside our apartment door. We even got our security deposit back after living there for 13...yes, count 'em...THIRTEEN years!

In 1999, after trying to find a home a number of years prior to that (once we'd have a sufficient amount set aside, one of our cars would decide to cough and wheeze and clean out our wallets and savings account), we saved, asked a TON of questions and started searching again.

We met a busload of agents but found one who was like an "older brother" figure to us and we ran him ragged. We were set to make an offer on a nice Bangor Box home, gorgeous interior, walk-up attic, the works...EXCEPT it had no yard to speak of, it was on a one way street and a stones throw from the medical center...which is fine if you're in ill health...otherwise it's a constant howl of sirens and traffic.

Our agent whose name shall remain, Bob Gilberti...insisted we look at a home that until recently was a FSBO (For Sale By Owner) that Stan Pyzynski was about to list.

I walked through the 4 bedroom Colonial and thought...Wow! This place is GORGEOUS! And it's on a DOUBLE LOT! It'll be a great home for SOMEONE else because there's no way on God's Green Earth we could afford this...

Robin, my Wife, a very intelligent woman and a head for figures was talking to Bob when I came back downstairs and she looked into my eyes and said the words I never thought I'd hear..."We Can Do This!"

A huge Catalpa Tree, raspberry patches, flower gardens, a vegetable garden and now, due to our love of the place, a patio deck we built with the help of my 4th "Little" from Big Brothers Big Sisters, More Gardens, rosebushes, lilies, 8 or more bird feeders, etc and a great bunch of neighbors, I realized something and for this year's Holiday Poem, I highlighted that realization...that what I had yearned for...had come true:

Several times a day, every day, for more than ten years now,

I've thought and said... "I LOVE this place."

It's a myriad of things that come together
and bring a smile to my face.

It's not just being with my Beloved, my Soul mate, my spouse,

It's not just having this wonderful home, this house...

It's not just cuddling our beloved felines and bunny...

It's something felt deep within,
something that can't be obtained with money.

I'm reminded of it at the start of the holiday shopping season...

That somewhere along the way...
many of us seem to have forgotten its reason.

In high school we were asked describe our vision of Utopia...

Our idea of Paradise.

Looking back on what I had written, I had to look twice.

What I described was like a massive neighborhood.

People got along and helped each other and life was good.

There's only one reason why we were all put here in the first place...

On this big beautiful blue rock, circling in outer space...

Every woman and man, child and creature...

Every father and mother...

Every sister and brother...

We were put here simply...

To love and to care for one another.

Happy Holidays written with Love by C.K. Olsen

December 8, 2009

From our hearts and home to yours...Love, Christopher & Robin and our

Felines Kiwi, Loki, Maggie & Abby as well as Mikey the Bunny

FIRST TIME HOMEBUYER TAX CREDIT

Frequently Asked Questions

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first‐time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over‐supply of homes for sale.

For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before
December 1, 2009.

Tax Credits

The Basics

1. What's this new homebuyer tax incentive for 2009?

The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount.

If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible?

Only first‐time homebuyers are eligible. A person is considered a first‐time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. How does a tax credit work?

Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual's income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 ‐ $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?

This tax credit is what's called "refundable" credit. Thus, if the eligible purchaser's total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference between $8000 credit amount and the amount of tax liability. ($8000 ‐ $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?

A few examples are provided at the end of this document. There are several steps in this calculation,

but most income tax software programs are equipped to make that determination.

FIRST TIME HOMEBUYER TAX CREDIT

6. Is there an income restriction?

Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my "income" determined?

For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year?

Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?

Not always. The credit phases‐out between $75,000 ‐ $95,000 for singles and $150,000 ‐ $170,000 for married filing joint. The closer a buyer comes to the maximum phase‐out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual's income reaches $95,000 (single return) or $170,000 (joint return).For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown:

Couple's income $165,000

Income limit 150,000

Excess income $15,000

The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).

In this example, the disallowed portion of the credit is 75% of $8000, or $6000

($15,000/$20,000 = 75% x $8000 = $6000)

Stated another way, only 25% of the credit amount would be allowed.

In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What's the definition of "principal residence?"

Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as "owner‐occupied" housing. The term includes single family detached housing, condos or co‐ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property?

Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property?

In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit.

Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage‐revenue bond financing will not disqualify an otherwise‐eligible purchaser. (Mortgagerevenue bonds are tax‐exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit?

NO. There is no repayment for 2009 tax credits.

14. Do 2008 purchasers still have to repay their tax credit?

YES. The $7500 credit in 2008 was more like an interest‐free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return.

Some Practical Questions

15. How do I apply for the credit?

There is no pre‐purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.

16. So I can't use the credit amount as part of my downpayment?

No. Congress tried hard to devise a mechanism that would make the funds available for closing costs,but found that pre‐funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

17. So there's no way to get any cash flow benefits before I file my tax return?

Yes, there is. Any first‐time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated taxpayments. Individuals subject to income tax withholding would get an IRS Form W‐4 from theiremployer, follow the instructions on the schedules provided and give the completed Form W‐4 back to the employer. In many cases their withholding would decrease and their take‐home pay would increase. Those who make estimated tax payments would make similar adjustments.

Some "Real World" Examples

18. What if I purchase later this year but can't get to settlement before December 1?

The credit is available for purchases before December 1, 2009. A home is considered as "purchased" when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before December 1, 2009 for purchases to be eligible for the credit.

19. I haven't even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?

You'll have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15,2009. They actually have three filing options.

• If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on

the 2008 return due on April 15.

• They can extend their 2008 income‐tax filing until as late as October 15, 2009. (The IRS grants

automatic extensions, but the taxpayer must file for the extension. See www.irs.gov for

instructions on how to obtain an extension.)

• If they have filed their 2008 return before they purchase the home, they may file an amended

2008 tax return on Form 1040X. (Form 1040X is available at www.irs.gov)

Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.

20. I purchased my home in early 2009 before the stimulus bill was enacted. I claimed a $7500 tax credit on my 2008 return as prior law had permitted. Am I restricted to just a $7500 credit?

No, you would qualify for the $8000 credit. Eligible purchasers who have already claimed the $7500 credit on a 2008 return for a 2009 purchase may file an amended return (IRS Form 1040X) for the 2008 tax year. This amended return will enable them to obtain the additional $500 credit amount.

21. If I claim my 2009 $8000 credit on my 2008 tax return, will I have to repay the credit just as the 2008 credits are repaid?

No. Congress anticipated this confusion and has made specific provision so that there would be no repayment of 2009 credits that are claimed on 2008 returns.

22. I made an eligible purchase of a principal residence in May 2008 and claimed the $7500 credit on my 2008 tax return. My brother, who has never owned a home, wishes to purchase a partial interest in the home this spring and move in. Will he qualify for the $8000 credit, as well?

No. Any purchase of a principal residence (or interest in a principal residence) from a related party such as a sibling, parent, grandparent, aunt or uncle is ineligible for the tax credit. Since you and your brother are related in this way, he cannot qualify for the credit on any portion of the home that he purchases from you, even if he is a first‐time homebuyer.

23. I live in the District of Columbia. If I qualify as a first‐time homebuyer, can I use both the $5000 DC credit and the $8000 credit?

No; double dipping is not allowed. You would be eligible for only the $8000 credit. This will be an

advantage because of the higher credit amount, plus the eligibility requirements for the $8000 credit are somewhat more easily satisfied than the DC credit.

24. I know there is no repayment requirement for the $8000 credit. Will I ever have to repay any of the credit back to the government?

One situation does require a recapture payment back to the government. If you claim the credit but

then sell the property within 3 years of the date of purchase, you are required to pay back the full

amount of any credit, including any refund you received from it. A few exceptions apply. (See below,

#24). Note that this same 3‐year recapture rule applies, as well, to the $7500 credit available for 2008. This provision is designed as an anti‐flipping rule.

25. What if I die or get divorced or my property is ruined in a natural disaster within the 3 years?

The repayment rules are eased for many circumstances. If the homeowner who used the credit dies

within the first three years of ownership, there is no recapture. Special rules make adjustments for

people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the

case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or

subject to condemnation by eminent domain by an authorized agency) within the first three years.

26. I have a home under construction. Am I eligible for the credit?

Yes, so long as you actually occupy the home before December 1, 2009.

WITHHOLDING EXAMPLES:

Note: The impact of estimated tax payments would be the same.

Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she

anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000.

She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.

Result: Sally's withholding satisfies her tax liability and reduces it to zero. She will receive a refund of

the full $8000.

Situation 2: Nick and Nora file a joint return. Nick is self‐employed and makes estimated payments;

Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first time homebuyers and are eligible for the $8000 refundable tax credit.

Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 ‐ $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit =$9200)

Situation 3: Cesar and Luz Maria both have income taxes withheld from their salaries and file a joint

return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 ‐ $5000). They also qualify for the $8000 first‐time homebuyer tax credit.

Result: Cesar and Luz Maria have been under‐withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 ‐ $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.

Source: Prepared by the National Association of REALTORS® Government Affairs Staff - February 2009

Resolve to Get Your Home Documents Organized!

As a person who is good at "saving" stuff...but not necessarily good at "organizing" all of it...I thought I would share this helpful article from Prudential's Site, PREA Center. Like comedian George Carlin described his home as a "place for my STUFF" I thought you would appreciate these tips:

As a homeowner, you begin to accumulate all sorts of records and papers the moment you made the offer on your home. Loan documents, inspection reports, title insurance policy, home improvement receipts, appliance warranties are just a few of documents that you may at one time or another need. Would you be readily able to locate these items? Are they filed away or in different junk drawers around the house? Knowing where these items are can save you a lot of time and even money in the long run.

Consider investing in a record-keeping system. It doesn't have to be expensive. You can purchase an accordion file and label each flap with a different category. Then use the following tips as a guide to get started.

Contracts and Legal Papers
Keep all the papers signed and/or given to you at the closing together in one place, preferably in a safe deposit box. These documents include the deed, settlement statement, appraisal, disclosures, mortgage note, inspections and any other reports, and title insurance policy. You will need these records again if you decide to refinance or sell your home.

Insurance Policies
Keep a copy of all insurance policies relating to your property together. This may include homeowners, flood and earthquake policies. With these documents, keep a list of insurance agents or companies and copies of correspondence related to claims.

Purchase and House Data
It's also a good idea to keep a copy of the original listing of your house, comparable market analysis, floor plans, blueprints, and historical information. If you own a newly built home, keep a list of contractors and material suppliers as well.

Property Taxes
Keep your tax bills and record of payment for as long as you own the home and possibly even longer. You may need these items if your tax returns are ever audited.

Home Maintenance and Improvements
Records in this category include receipts for repairs or replacement expenses, names of contractors, contracts, and a log of maintenance tasks.

Warranties, Manuals and Receipts
These documents provide you with a proof of purchase date and determine service and parts guaranteed. In addition, the manuals usually provide care information so you can help ensure your household appliances are being properly maintained. You should keep your warranties, manuals and receipts for these items for as long as you own the appliances.

Home Inventory
If you were ever to lose any of your possessions due to fire, burglary, or vandalism, having a home inventory can help you avoid a lot of heartache and make it easier when filing an insurance claim.

Start with a sheet a paper for each room in the house. Go around the room and list every item. Don't forget the attic, basement or other storage places. For each item, write the original cost, purchase date, replacement cost, model number, brand name, where purchased, and a general description. You can also use a computer software system so that you have an electronic copy.

Besides a written inventory, take photos or video of each room for visual documentation. It is also a good idea to arrange valuable collections, silver, jewelry, etc. and take close up photos.

Keep a copy in your home files and the originals in a fireproof safe or safe deposit box. Make sure you update your home inventory photos and list at least once a year.

Organizing your home files may take a considerable amount of time initially, but it will definitely be time well spent in the event you need the documents later on.