Topics covered : *Fannie Mae and Freddie Mac-What is in the works that could affect investors
*Update on Seasoning Requirements.
*Other options-Commercial Loans.
*Leverage-home equity loans, lines of credit, etc
*Recent Legislation-any advantage for real estate investors?
*Credit Crisis- when will it be over?
Archive for August, 2008
Welcome to this weeks Interest rate and market update. This week’s recording is about 4 minutes long, and covers many different and important areas of our market and economy. It is based based on events from this week, economic reports, product updates and national news. Please, don’t forget to tell all your friends about the Wealth Center and all that we do to help and serve others. Also tune into our next radio show September 7th on WAEB AM 790 at 7:30am. Enjoy the broadcast
Sandy Botkin, attorney and Certified Public Accountant is Chief Executive Officer and Principal Lecturer of the Tax Reduction Institute based in the Washington, DC area. During the past ten years, Sandy has taught more than 50,000 taxpayers how to save over $300 million on their taxes. He consistently earns rave reviews for his clear and humorous presentations. Prior to joining the Tax Reduction Institute, Sandy spent three years in the tax department of the international accounting firm, Touche Ross. He has extensive financial and legal experience, including five years as a legal specialist in the Office of Chief Counsel for the Internal Revenue Service. He is the author of the bestselling books “Real Estate Tax Secrets of the Rich” and “Lower Your Taxes Big Time”.
Here is some information on the new first time home buyers credit.
1. Unlike other credits, the first-time homebuyer credit must be repaid in equal installments ( $ 500/year) over 15 years, essentially making it an interest-free loan from the government for most qualifying homeowners. Repayments start 2 years after the year in which the residence is purchased.
2. “Purchase” as used in this new law occurs when title closes. In addition, homebuyers claiming the credit may not acquire the property from certain related persons, and they must satisfy certain basis rules.
3. The credit phases out for taxpayers with AGI of $ 150,000- $ 170,000 joint/$ 75,000- $95,000 single.”
4. The taxpayer must claim the credit on a 2008 or 2009 tax return. However, a first-time buyer who purchases a principal residence in 2009 after filing a 2008 tax return has the option of filing an amended 2008 return to claim the credit.
5. A “first-time homebuyer” is someone, or spouse, who had no ownership interest in a PRINCIPAL RESIDENCE during the 3-year period before the new home is purchased.
6. Renters who also own a vacation home may qualify for the credit since the 3-year lookback period for owning a home applies only to principal residences.
7. Under the new law, two or more unmarried individuals may purchase a residence and qualify for the credit, allocated between them as the IRS prescribes, up to a maximum credit totaling $ 7,500.
8. The IRS will disallow the credit if the taxpayer disposes of the residence — OR THE RESIDENCE CEASES TO BE THE PRINCIPAL RESIDENCE –before the close of the tax year for which the credit would be allowed. The IRS will also disallow the credit if the taxpayer is a non-resident alien or is financing using tax-exempt mortgage revenue bonds.
9. If a taxpayer sells or no longer uses the home as his principal residence before repaying the credit (i.e. 17 years after the year of purchase), the unpaid balance becomes due in the year in which the residence is sold or no longer used as the taxpayer’s principal residence. HOWEVER, the amount of recapture credit may not exceed the amount of gain from the sale of the residence to an unrelated party.
10. The credit does not have to be repaid if the taxpayer dies. Special rules also exist for an involuntary conversion, and for a residence transferred in a divorce.
There are 2 other items of interest in this new tax act :
A. PROPERTY TAX DEDUCTION, UP TO $ 500, FOR NON-ITEMIZERS AS INCREASED STANDARD DEDUCTIONS FOR 2008 ONLY.
B. REDUCED HOME SALE EXCLUSION FOR PERIODS THAT THE HOME WAS NOT USED AS THE PRINCIPAL RESIDENCE AFTER 1/1/2009. (Non-qualified use for this computation of allocation of the $250K/$ 500K exclusion does not include any such use before 2009.)
This is not your normal update, because it is not a radio broadcast. Broadcast are limited to time and subject. This update covers a variety of subjects including the market and interest rates. The update is about 16 minutes long. Enjoy! And do not forget to tell all your friends about the Wealth Center and all that we do to help and serve others.
This is not your normal update, because it is not a radio broadcast. Broadcast are limited to time and subject. This update covers 5 ways to protect yourself in this market, and a variety of subjects including interest rates. The update is about 15 minutes long. Enjoy! And do not forget to tell all your friends about the Wealth Center and all that we do to help and serve others.
This is not your normal update, because it is not a radio broadcast. Broadcast are limited to time and subject. This update covers a variety of subjects including the market and interest rates. The update is about 16 minutes long. Enjoy! And do not forget to tell all your friends about the Wealth Center and all that we do to help and serve others.
