Reporting from Washington - First-time home buyers had better get a move on if they hope to take advantage of the $8,000 federal tax credit. The window of opportunity is closing rapidly.
To qualify for the credit, any transaction involving a first-time buyer must close before midnight Nov. 30, when the valuable tax benefit expires. And because the buying and lending processes can be slow, you're going to need every bit of that time to close escrow.
Friday, February 19, 2010
Congratulations to Don and Princess!!! :)
Congratulations to Don and Princess on purchasing their brand new, breathtaking 2 bedroom, 2.5 bathroom Lennar townhouse near the vibrant "District" in the city of Tustin! After several months of anticipation, the construction of their townhouse was completed in late November. Since then, the newlyweds have beautifully decorated and furnished their home and recently had a housewarming to showcase and introduce their gorgeous home to their friends and family. I wish them all the best as they start their family together!
Saturday, August 22, 2009
Wednesday, May 27, 2009
Congratulations to Kevin and Cynthia!!!
Congratulations to Kevin and Cynthia!!! The couple just purchased a 1,370 sqft, 4 bedroom, 2 bath home in Cypress, CA for $375,000. They have begun remodelling the home and it is scheduled be be completed before their wedding! I'm so excited for them as they start their new life together!!!
Wednesday, April 1, 2009
$10,000 Tax Credit on New Home Purchase!
The State of California just passed a $10,000 Tax Credit for New Home Purchases!!! Take advantage of this tax credit along with the $8,000 Tax Credit from the IRS for First-time Homebuyers!!!
Click below for more information on the $10,000 Tax Credit on New Home Purchases:
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
http://www.cbia.org/go/cbia/newsroom/press-releases/homebuilders-hail-passage-of-homebuyer-tax-credit/
Click below for more information on the $10,000 Tax Credit on New Home Purchases:
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
http://www.cbia.org/go/cbia/newsroom/press-releases/homebuilders-hail-passage-of-homebuyer-tax-credit/
Sunday, March 15, 2009
American Recovery and Reinvestment Act of 2009
H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. Later that day, the Senate also passed the bill by a vote of 60 - 38. The President signed the bill on February 17, 2009. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.
View how the U.S. House of Representatives voted>View how the U.S. Senate voted>
The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.
The bill includes the following provisions:
Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Chart Highlighting the Major Modifications to the First-Time Homebuyer Tax Credit> (PDF: 309K)
Frequently Asked Questions> (PDF: 483K)
NAR's Presentation: The 2009 First-Time Homebuyer Tax Credit (PDF: 319K)
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.
Estimated 2009 FHA, Fannie Mae and Freddie Mac Loan Limits> (PDF: 1.3M)
Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2008 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
How REALTORS® Can Contribute to Local Community (NSP) Efforts
Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.
Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.
The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.
These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available.
View how the U.S. House of Representatives voted>View how the U.S. Senate voted>
The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.
The bill includes the following provisions:
Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Chart Highlighting the Major Modifications to the First-Time Homebuyer Tax Credit> (PDF: 309K)
Frequently Asked Questions> (PDF: 483K)
NAR's Presentation: The 2009 First-Time Homebuyer Tax Credit (PDF: 319K)
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.
Estimated 2009 FHA, Fannie Mae and Freddie Mac Loan Limits> (PDF: 1.3M)
Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2008 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
How REALTORS® Can Contribute to Local Community (NSP) Efforts
Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.
Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.
The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.
These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available.
Monday, February 16, 2009
The Advantages of Marrying a Realtor! ;)
Here's an interesting article I read on realtor.org. Enjoy!
__________________________________
Why REALTORS® are More Desirable as Spouses?
By C. Anthony Phillips, CPA
Member of the GRI State Faculty
Assume you are a full-time REALTOR® (or someone who materially participates in a real property trade or business) and meet the eligibility tests. Also assume that you have an adjusted gross income of $155,000 and a $30,000 yearly rental real estate loss. Assume a non-REALTOR® becomes your spouse. Also assume that the non-REALTOR® spouse has an adjusted gross income of $150,000 and an apartment house which produces $15,000 in passive losses per year. Prior to marrying you, your non-REALTOR® spouse would have not been able to deduct their $15,000 in passive losses from rental activities.
Because you meet the eligibility tests, you are allowed to deduct your $30,000 rental real estate loss even though your adjusted gross income exceeds $150,000. Because your non-REALTOR® spouse is married to you and elects to file a joint return, your non-REALTOR® spouse is also allowed to deduct their otherwise non deductible $15,000 in rental real estate loss. Your non-REALTOR® spouse clearly benefits by being married to you because they are permitted to deduct $15,000 of rental real estate loss they would have otherwise been unable to deduct.
The tax code contains a number of provisions which heavily penalizes married couples. Section 469 (c)(7) of the Internal Revenue Code seems to be one of the few areas of the tax code which encourages marriage. Not only does it encourage marriage, but it appears to encourage marriage to a REALTOR®.
Material Participation
Material participation in addition to several other requirements, requires that the individual be involved in the operations of the activity on a regular, continuous and substantial basis.
Real Property Trade or Business
This means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing or brokerage trade or business. Some taxing authorities think you have to be a broker to get this benefit, but this is currently in tax court being decided.
Eligibility Tests
A full time REALTOR® will satisfy the eligibility requirements when:
1. more than 50% of the REALTOR® 's personal services during the tax year is performed in real property trades or businesses in which the REALTOR® materially participates, and
2. the REALTOR® performs more than 750 hours of service in those same trades or businesses.
Spouses
If one of the spouses in a joint return meets the eligibility requirements of service in real property business, then the eligibility rules apply to the joint return.
Aggregation of Activities
Each interest of a REALTOR® in rental real estate is to be considered a separate activity and the REALTOR® may elect to treat all interest in rental real estate as one activity. A REALTOR® who spends 450 hours in real estate rental operations and also spends 700 hours in real estate brokerage and sales would aggregate both activities to meet the material participation rules.
Treatment of Employees
In applying this eligibility test, the personal services of an employee is not counted unless the employee is also a five-percent owner of the corporation's outstanding stock. A REALTOR® who is an independent contractor and receives a Form 1099 instead of Form W?2 would not be considered an employee.
__________________________________
Why REALTORS® are More Desirable as Spouses?
By C. Anthony Phillips, CPA
Member of the GRI State Faculty
Assume you are a full-time REALTOR® (or someone who materially participates in a real property trade or business) and meet the eligibility tests. Also assume that you have an adjusted gross income of $155,000 and a $30,000 yearly rental real estate loss. Assume a non-REALTOR® becomes your spouse. Also assume that the non-REALTOR® spouse has an adjusted gross income of $150,000 and an apartment house which produces $15,000 in passive losses per year. Prior to marrying you, your non-REALTOR® spouse would have not been able to deduct their $15,000 in passive losses from rental activities.
Because you meet the eligibility tests, you are allowed to deduct your $30,000 rental real estate loss even though your adjusted gross income exceeds $150,000. Because your non-REALTOR® spouse is married to you and elects to file a joint return, your non-REALTOR® spouse is also allowed to deduct their otherwise non deductible $15,000 in rental real estate loss. Your non-REALTOR® spouse clearly benefits by being married to you because they are permitted to deduct $15,000 of rental real estate loss they would have otherwise been unable to deduct.
The tax code contains a number of provisions which heavily penalizes married couples. Section 469 (c)(7) of the Internal Revenue Code seems to be one of the few areas of the tax code which encourages marriage. Not only does it encourage marriage, but it appears to encourage marriage to a REALTOR®.
Material Participation
Material participation in addition to several other requirements, requires that the individual be involved in the operations of the activity on a regular, continuous and substantial basis.
Real Property Trade or Business
This means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing or brokerage trade or business. Some taxing authorities think you have to be a broker to get this benefit, but this is currently in tax court being decided.
Eligibility Tests
A full time REALTOR® will satisfy the eligibility requirements when:
1. more than 50% of the REALTOR® 's personal services during the tax year is performed in real property trades or businesses in which the REALTOR® materially participates, and
2. the REALTOR® performs more than 750 hours of service in those same trades or businesses.
Spouses
If one of the spouses in a joint return meets the eligibility requirements of service in real property business, then the eligibility rules apply to the joint return.
Aggregation of Activities
Each interest of a REALTOR® in rental real estate is to be considered a separate activity and the REALTOR® may elect to treat all interest in rental real estate as one activity. A REALTOR® who spends 450 hours in real estate rental operations and also spends 700 hours in real estate brokerage and sales would aggregate both activities to meet the material participation rules.
Treatment of Employees
In applying this eligibility test, the personal services of an employee is not counted unless the employee is also a five-percent owner of the corporation's outstanding stock. A REALTOR® who is an independent contractor and receives a Form 1099 instead of Form W?2 would not be considered an employee.
Subscribe to:
Posts (Atom)
