Thursday, March 25, 2010

Mortgage Forgiveness / First Time Buyer / Move Up Buyer Credit / Energy Improvements Credit Buyer /

1. 2009-10 First-time Homebuyer
Tax Credit
  • Who It Helps: Recent (or current!) homebuyers who had not owned a home in the 3 years prior to buying, but bought one in 2009 or this year (must be in contract on or before April 30, 2010). Depending on when you bought (or buy! there's still some time left!) income and purchase price limits may apply.
  • How It Helps: Depending on your income and purchase price, you can receive up to an $8,000 fully refundabletax credit. (That means if you were already getting a refund, you'll get a bigger one!) You can claim the credit on your 2009 tax return (the one you file on April 15th), even if you bought in 2010.
  • IMPORTANT NOTE: Per the IRS website, "because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic— return and attach Form 5405."

    2. 2009-10 Move-Up Buyer Tax Credit
    • Who It Helps: Current homeowners who have lived in the home they are selling, or have already sold, as their principal residence for five consecutive years of the last eight years who closed escrow between November 7, 2009 and July 1, 2010, so long as they are in contract on or before April 30, 2010.
    • How It Helps: Eligible homeowners can receive a tax credit of as much as $6,500, depending on income. You can claim the credit on your 2009 tax return (the one you file on April 15th), even if you bought in 2010.
          • IMPORTANT NOTE: Can't e-file to collect this one, either - see #1, above.

          3. Energy Efficient Housing Tax Credits
          • Who It Helps: Homeowners who invested in making their homes more energy-efficient in 2009 and 2010.
          • How it helps: Offers them a 30 percent tax credit on qualifying purchases of energy-efficient furnaces, windows and insulation.


          4. Private Mortgage Insurance Deduction
          • Who It Helps: Homeowners who bought a home in 2009, and put less than 20 percent down on their homes. These are the folks whose lenders required them to pay for PMI, or private mortgage insurance.
          • How It Helps: Allows them to deduct the costs - upfront and monthly - of PMI.


          5. The Mortgage Forgiveness Debt Relief Act

          • Who It Helps: Short sellers, owners who lost homes through foreclosures or had their mortgage balance reduced through loan modifications.
          • How It Helps: Normally, when a loan is cancelled or forgiven through, for example, a short sale or foreclosure, the cancelled debt is transformed into taxable income - and the IRS comes looking for their cut. Under this Act, qualifying mortgage debt forgiven through foreclosure, short sale or loan modification is allowed to be excluded from taxable income. The forgiven mortgage debt must be a loan on your personal residence, and must be related to the purchase of your home (if you pulled a bunch of cash out and did a short sale on that mortgage, you might not qualify).

          Looking to buy or sell your home or an investment property do call us at 408-656-5343 or check our web site
          at www.ruthandperry.com
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