DC CLOUT "DC Area Real Estate Buzz"

First-Time Homebuyer Credit: Members of the Military and Certain Other Federal Employees

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.

Question and Answer

Q. Are both spouses required to be overseas for the requisite time period in order to qualify for the 2011 extension to claim the credit?  

A. Only one spouse must be overseas on official extended duty for the requisite amount of time for either spouse to be eligible for the 2011 extension of time to purchase a principal residence and claim the credit. 

Got other questions respond to this post or contact me at dcrealtor@live.com    Al Matlock Washington DC Realtor

First Time Home Buyer Tax Credit Extension Details

Although the Extended Home Buyer Tax Credit expired on April 30, 2010, home buyers who signed a written, binding contract by that date and have not closed by July 1, 2010 may still be able to claim the credit.

The extension applies only to transactions that had ratified contracts in place as of April 30, 2010 that have not yet closed.  The new closing deadline for eligible transactions is September 30, 2010.

Still have question, contact me @ dcrealtor@live.com

The First-Time Home Buyers Tax Credit Expires in 25 days

Time is running out for the Federal First Time Home buyers tax credit that was extended last November.  If you are planing to buy within the next few months and intended to take advantage of the $8000 free money, below are deadline you need to be aware of.

1. You need to have a ratified contract by April 30, 2010

2. You must close on the purchase by June 30, 2010

3. On March 31, 2010  the Feds will stop buying U.S. mortgage-backed securities. " Industry observers believe that interest rates will spike anywhere from half to a full percent, or from around 5 percent to maybe 6 percent.'

To get you started immediately DCclout is now scheduling one on one complimentary one hour home buying seminars.  The one on one seminars are intended to address the time restraints of many who were unable to fit our fixed time seminars into their busy schedule.

Key Topics: The $8000 Federal Tax Credit 

DC's Home Purchase Assistance Program (HPAP)

We cover the entire home buying process...

To schedule your one on one home buying seminar contact us at al@dcclout.com or 301/452-2278

Homebuyers Tax Credits Comparison Chart     Extended Home Buyer Tax Credit 2009/2010 - The Specifics Here    How to Get the Extended Home Buyer Tax Credit

DC Clout DC's Home Buying and Selling Resource Center

First-Time and Repeat Buyer Tax Credit Explained

Remember you can now afford to live in neighborhoods that were once out of reach..

For more tax credit info and begin your dream home purchase contact contact Al Matlock at dcrealtor@live.com

$6,500 New Tax Credit for existing homeowners

The Feds have added existing homeowners to the new tax credit signed on 11/06/09 by President Obama.  

The specifics for existing homeowners.....

A $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

Click here for entire program details..

Don't let this opportunity pass. Contact Al at dcrealtor@live.com and begin your home search today..  Don't delay - the pipeline is now clogged with buyers who were trying to make their purchases before the previous credit expired.  For them this is a reprieve, many would have not been able to close by the deadline...

Homebuyers Tax Credits Comparison Chart

click image for larger view....

soruce nar

provided by Al Matlock  dcrealtor@live.com

Federal Housing Tax Credit explained By Chief Tax Economist of NAHB

HUD: Tax Credit Can Be Used on Closing Costs

FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.

There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Courtesy of Al Matlock Washington DC Realtor for DCClout.com      al@dcclout.com

Applying the Home Buyer Tax Credit to Your 2009 Return

Applying the Home Buyer Tax Credit to Your 2008 Return       Tax Credit Can Be Used on Closing Costs

credit details

To claim the credit as part of your 2009 return, you will need: The standard Form 1040 and Form 5405 for the home buyer tax credit.

1. First begin Form 1040.
   
   
2. Be sure to take note of your adjusted gross income, which you enter on lines 37 of the form. Form 5405 actually requires you to note your modified adjusted gross income, but that affects few people, so most will just use their adjusted gross income.
   
   
3. When you come to Line 69 you'll be asked to enter your tax credit amount. To do that, you'll need to first complete Form 5405. 
   
   
4. Once you complete Form 5405, enter the amount on Line 69, then complete your return.
   
   
5. Attach Form 5405 to your return.

Collecting Your Refund

Any refund for which you qualify will be sent to you

Courtesy of Al Matlock Washington DC Realtor for DCClout.com      al@dcclout.com

Applying the Home Buyer Tax Credit to Your 2008 Return

 Applying the Home Buyer Tax Credit to Your 2009 Return   Tax Credit Can Be Used on Closing Costs

credit details

To claim the credit on your 2008 taxes, you must file an amendment to your 2008 return. To do this you will need two forms: Form 1040X (PDF 365K ) for filing an amended return; and Form 5405 (PDF 257K) for the home buyer tax credit.

You can visit the IRS site using the links, print out, and fill in the forms manually or type into the forms and save them on your computer. Be aware, though, that the 1040X tax form can only be filed in hard copy, and cannot be submitted electronically.

1. First, fill out Form 5405 using the instructions in Determining the Amount of Your Home Buyer Tax Credit. 
   
   
2. Then fill out Form 1040X.
   
   On the 1040X you'll find a section called "Payments." Look for Line 15, "Credits." On this line you have three columns. On the first you list the credits you took in your original filing (for most people, this will likely be zero); on the second you list any new credits; and on the third you list the "correct" amount (that is, what the new amount should be).
   
   
3. If in your original filing you took no credits, you enter a zero in the first column.
   
   
4. In the second column you enter the amount of your credit, which for many people will be the full $8,000.
   
   
5. And in the third column you list the correct amount, which in most cases simply means restating the $8,000.
   
   
6. Add your housing tax credit amount to any other amendments you're making then total all the amendments up. 
   
   
7. On the back of the form, write an explanation of why you're filing the amendment. Here you should explain in 2-3 sentences why you want to take the credit. You should include the day that you closed on the house and mention that you're electing to amend your 2008 return rather than wait until 2009.
   
   
8. Finally, attach Form 5405 to Form 1040X and file your amended return.

Collecting Your Refund

Any adjustment to your 2008 taxes along with any refund for which you qualify will be sent to you. Since the tax credit is fully refundable even if your tax liability is less than the tax credit amount, you get the full value of the credit. That means the IRS will cut you a check for the balance.

Courtesy of Al Matlock Washington DC Realtor for DCClout.com      al@dcclout.com