The Federal Tax Credits Blog

Posts Tagged ‘$6500’

Question: 7500 first time home buyer credit a good deal?

I have just purchased my first home with my fiance. ( Our wedding day is May 02, 2009 =) ) and have heard about the new tax credit for first time homebuyers. I have read all the information about it & realize that you have to pay it back for 15 years at $500 a year which basically makes a zero interest loan. My question is whether it is a wise idea to take this loan. I know if you invest it that you could actually make money off of it but I would use it to pay off the rest of my car, and three seperate credit cards. The total balances on all these bills will be about $6500 in march. Is this a good way to use the money?

also our house is in my name and his name. Neither one of us ever owning a house before. How does the credit work. Him half and me half or all to just one of us??

Any answers or opinions Please. I would love to know what you guess think. Thanks!

Answer: The credit will help you with your down payment, you need to get it to 20%.

As far as the loan, you will get one loan, which you both pay. There are no halfs.

NAR Home Buyer and Seller Survey Shows Value of Long-Term Home Ownership

NEW ORLEANS, LA–(Marketwire – 11/05/10) – Home buyers today have affirmed a long-term view of home ownership, the typical seller is experiencing positive returns and the vast majority of home owners see their property as a good investment, according to the latest consumer survey of home buyers and sellers. The study was released here today at the 2010 Realtors Conference & Expo. The 2010 …

Property WANTED Northport/North Greenlawn

Value added tax (VAT) has always been a cause of perplexity to the real estate buyers. While some builders are recovering VAT from the customers, there are others who are not charging their customers at all. This has led to much confusion for the property buyers as to whether VAT needs to be paid and if it does need to be paid, what should be the amount.

The VAT system replaced the sales tax system with the objective of simplifying the tax regime and to avoid the problem of double taxation. VAT is a multi-stage tax levied at each stage of the value chain with the provision that tax credit will be allowed for the tax paid at an earlier stage.

Under the VAT structure, there are two categories of rates – four percent or 12.5 percent. The idea behind this was to bring about uniformity in the levying of tax by different States and simplify the complex structure under the sales tax system. Different States have enacted the VAT Act for their State along with certain variations. While some States have moved away from the basic rate structure, some have introduced certain exemptions and concessions for the benefit of specific sectors.

In Karnataka, the real estate developers or builders have an option to charge VAT to the customers under two schemes. The first one is the composition scheme where the builder pays four percent of the construction cost as VAT. In this case, he does not claim anything from the individual owners.

Under the second scheme, the builder can collect 12.5 percent of 70 percent of the cost of construction from the individual owners. This works out to 8.75 percent of the total cost of construction. VAT is applicable only to materials and 70 percent of construction cost is representative of the materials cost in construction. VAT is calculated on the cost of the flat, parking space cost and amenities.

While some may think that it is unfair for buyers where the builder opts for the second scheme, it is not so. In the first case, although the builder is paying VAT himself, the additional burden will be passed on to the owners by way of a higher price. Similarly, where the builder is recovering VAT from the owners, the price of the flat would be lower to that extent since VAT is an additional cost to the buyer. Failure to do so may render him uncompetitive in his overall pricing.

Courtesy:- TOI dt:- 05-09-2009

Business Notes

NEWS & NOTES

Nov 2009 Home Buyer Tax Credit

Question: Should I extend or amend my tax return to receive $8000 tax credit?

I’ll be buying a house after the tax deadline in April and I’m debating filing for an extension or amending my tax return later. I know amending can take 3 months sometimes to receive your payment, is it the same case if you file your tax return later with an extension? I would really prefer to receive my return within a couple weeks and not a couple months.
Talking 2008 return here.

Answer: It’s your call. File Form 4868 for an automatic 6 month extension of time to file. If you’re not desperate for whatever refund might be due without the credit, going that route will dramatically speed the payment of the credit to you. We’re talking 2 weeks or so vs up to 16 weeks.

As long as you have a net refund due when you actually file there is no need to pay anything with the 4868, even if you have a calculated tax due at the moment. If you do, keep in mind that if the purchase falls through for any reason you may be looking at some penalties and interest for late payment.

Man pleads guilty in federal court

Dec. 30, 2009

8000 tax credit extension

Calendar

Submissions for “Community Calendar” are required two weeks preceding the date of publication. Send to: Mary Ann Bottari, Pioneer Press, 3701 W. Lake Ave., Glenview IL 60026; mbottari@pioneerlocal.com. Information may be faxed to (847) 486-7495.

Tax Credit for First Time Home Buyer Loans, FHA and Government Mortgage Incentive Program

Question: Can we get the federal tax credit if only one spouse is a homeowner?

I am not sure whether or not we (I) qualify for the repeat home buyer tax credit (the one for 6500$), can you give me some advice?

I purchased my home in April 2004 and have lived in it continually. My boyfriend (now my husband) has lived in it since 2005. We got married over a year ago. The house is only in my name, I never had him added to the title or mortgage.

I know that I, unmarried, would qualify for the repeat homeowner tax credit. My husband, if he were unmarried, would qualify for the 8000 first time buyer credit. The federal website says they take the status of both spouses into account. So I have no idea whether or not we would get caught by some red tape in which we would get no credit at all.

Help?

Answer: The IRS has started to hand out information on the repeat buyer situation. BOTH spouses must meet the test to claim a credit.

According to the information I am copying from IRS.GOV in below, you do NOT meet the tests for either credit. Tough. (Sarcastically, I love how providing FACTS from the IRS earned me 2 negatives.)

Married and Co-Purchasing Homebuyers
Q. I am a long-time resident (have owned and used my current home as a principal residence for five consecutive years out of the eight-year period ending on the date of purchase of the new residence) but my spouse has lived there for only three years. Can we qualify for the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both spouses must have owned and used the same previous principal residence for five consecutive years out of the 8-year period ending on the date of purchase of the new principal residence to qualify for the credit. (12/14/09)

Q. I am a long-time resident and current homeowner and my spouse is a first-time homebuyer (has had no ownership interest in a principal residence during the three-year period ending on the date of purchase of a new principal residence) and we purchased a new principal residence. Can we qualify for either the first-time homebuyer credit or the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both you and your spouse must be first-time homebuyers in order to qualify for the first-time homebuyer tax credit. Since you had an ownership interest in a principal residence during the three-year period ending on the date of purchase, neither you nor your spouse qualifies for the credit. Similarly, both you and your spouse must be long-time homeowners of the same previous principal residence in order to qualify for the long-time resident homebuyer credit. Since your spouse is not a long-time homeowner of your current principal residence, neither of you qualify for the credit. (12/14/09)

Q. I am a long-time homeowner of a principal residence and my spouse is a long-time homeowner of a different principal residence. Can we qualify for the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both spouses must have owned and used the same previous principal residence for five consecutive years out of the eight-year period ending on the date of purchase of the new principal residence to be eligible for the credit. Since you and your spouse owned and used different principal residences, neither of you qualify. (12/14/09)

Q. How does the allocation provision work when unmarried taxpayers purchase a home together and both qualify for the first-time homebuyer credit under different tests?

A. Co-purchasers who are not married may allocate the credit using a reasonable method. A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit. The maximum credit for a taxpayer who qualifies under the long-time resident test is $6,500, and the maximum credit for a taxpayer who qualifies under the first-time homebuyer test is $8,000. One example of a reasonable method is to allocate $6,500 to the long-time resident homebuyer and $1,500 to the first-time homebuyer. (12/14/09)

According to this you do NOT qualify as he won’t meet the 5 year own/lived requirement.