Important Questions Answered about the 2008 First Time Homebuyer’s Tax Credit
For more information, visit http://www.irs.gov/taxtopics/tc611.html
Q: If I sell my home, am I required to repay the credit?
A: Yes, you must repay the remaining balance of the credit with the tax return for the year you sell your home.
Q: If I get a divorce and transfer the home to my spouse, am I required to repay?
A: No, the spouse that keeps possession of the house is responsible for repaying the entire remaining credit amount.
Q: If I no longer use this home as my main residence, do I have to repay?
A: You may need to add the entire remaining unpaid credit amount to your income tax on your next return.
Q: What are the exceptions where I may not have to repay the full credit?
A: If you transfer your home as part of a divorce settlement, you former spouse who keeps the home is responsible for making the rest of the payments
If your home is destroyed, condemned, or disposed of under threat of condemnation and you purchase a replacement home within two years, you continue to repay the credit in installments each year.
If you lose your home in a foreclosure sale, you repay the credit only up to the amount of the gain
If you die, no further repayments are due. If you claimed the credit on a joint return, your surviving spouse pays only his or her half of the remaining credit repayment amount.
HUNT Mortgage does not advise on any personal income tax requirements or issues
Credits: Hunt Mortgage
For more information, please feel free to contact us: Phone:315.671.5478 Website: www.HodgkinsAndOHara.com Email: info@HodgkinsAndOHara.com Facebook: http://facebook.hodgkinsandohara.com/ Twitter: www. twitter.com/hodgkinsohara
The Facts on the 2008 Tax Credit
With the First Quarter almost behind us, what can we expect for the rest of 2011?
2. Real Estate Brokerages will Merge. In a desperate market, many find the need to consolidate in effort to stay afloat. Smaller real estate companies are struggling to keep their doors open with expenses and a slow market. As a result, many of them may merge with larger companies better able to sustain the ups and downs of the market. And some larger ones will combine forces in order to take advantage of synergy and market domination.
3. Sales of Entry Level Homes will Dominate. With the lower prices of homes today and decreased insurance prices, those looking to get into their first home will be commonplace in the market. These affordable prices mean someone who has never owned a home should and will take advantage of the state of the real estate market today.
4. Some Luxury Homes Will Sell as Short Sales. Nicer homes are often bought with a larger down payment. While this gives a certain amount of wiggle room in the short term because mortgage payments are typically lower, the owners of these homes are worried.
The wealthy who buy the large luxury homes usually count on a nice retirement in their later years. As the market continues to decline or plateau, so are retirement accounts. Some are choosing to get out of their homes as quickly as possible to funnel more money into retirement before it is too late. This trend will likely continue through out 2011.
5. Mortgages Will Continue to Be Cheap. Since credit score requirements to receive a loan have gone up (minimum of a 700 score), it is more difficult to get a loan. As a result, experts predict the federal government will likely keep interest rates low to stimulate the real estate market.
6. Mortgage Interest Deductions will Remain. There has been worry that Congress may take away mortgage interest deductions from Americans. Most believe, however, this is unlikely to happen since it would cripple the already handicapped housing market.
8. Cash Investors will Win. Cash talks much louder today than credit. Obtaining a loan you will pay out over time is much riskier to a seller than putting down cash on something. Sometimes you can even pay less on an investment if you pay in cash.
9. Many Mortgage Brokers will Fold. A law passed in 2008 which dictated new guidelines for mortgage brokers went into full effect on January 1, 2011. These new rules are much stricter and make being a mortgage broker more difficult. Many will simply go out of business.
10. Foreclosure and Short Sale Lawsuits will Start. Think you are off scot free once you have a foreclosure or short sale? Think again! In fact, lenders can still pursue you after you think you’ve washed your hands of a bad home loan. In many states, you can be sued for the liability of the remainder of a loan. This means if your home went into foreclosure or short sale and the lender didn’t retrieve the total amount owed, they can still pursue you for the remaining amount.
Improve Your Home's Value and Sell Fast
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Obey the 24-hour rule
A great article that can be applied to all aspects of life's success and failures. A great read!
-Chip & Tom
By Harvey Mackay
Don Shula is a legend -- an incredibly successful professional football coach. He holds the NFL record for most career wins, 347 over 32 seasons. He led the Miami Dolphins to two Super Bowl victories, including the one that capped the only perfect season in NFL history.
How did he do it? By not dwelling on the past. Shula had a "24-hour rule," a policy of looking forward to the next challenge instead of dwelling on the previous victory or failure. The coach allowed himself, his coaching staff and his players a maximum of 24 hours to celebrate a victory or brood over a defeat. During those 24 hours, Shula encouraged them to feel their emotions of success or failure as deeply as they could.
But the next day, it was time to put it all behind them and start concentrating their energy on preparing for their next game. His philosophy was that if you keep your failures and victories in perspective, you'll do better in the long run.
What a difference a day makes! I absolutely agree with Shula's philosophy. Let me explain why.
Let's start with a colossal failure. How often have you been tempted to throw in the towel after losing a big sale or watching a million-dollar deal fall through, only to have your luck turn a day or two later?
Every morning brings new potential, but if you dwell on the misfortunes of the day before, you tend to overlook tremendous opportunities. Instead of seeing the possibilities for success, you hesitate, concentrating on the dark clouds rather than the silver lining.
Next step in the downer process is the vibes you send out to your customers. Your usual enthusiasm is seriously compromised because you are waiting for rejection. And that's exactly what you'll deserve.
Snap out of it! You've had plenty of success before. This episode was just a bump in the road. Don't turn it into a detour.
Buck Rogers, former vice president of marketing at IBM and author of Getting the Best Out of Yourself and Others, has this advice to stay motivated: "To be successful, you have to believe you can change the conditions in your life. You have to get out of the back seat of someone else's car and get behind your own steering wheel. You can't wish away the things in your life that make you unhappy and you can't daydream your hopes into reality . . . Make things happen."
On the opposite end of the spectrum is the spectacular victory -- the referral that turned into your biggest account, the employee of the month award, the amazing idea that turned your company around. Do you think now is a good time to coast or to rest on your laurels?
Absolutely not! Celebrate with your co-workers, go home and take the night off, and then come back to work in the morning ready to do an even better job the next day. You are on a roll. Don't waste the momentum.
Your bragging rights expire after 24 hours. It's fine if others want to congratulate you. Be gracious, thank them and get back to work. A great accomplishment shouldn't be the end of the road, just the starting point for the next grand destination. Success breeds success.
My friend Zig Ziglar says he is often challenged by people who want to know what motivation is. He relates a great example: "There are those who say that when someone goes to a motivational session they get all charged up, but a week later they're back where they were before they attended the session. In short, motivation isn't permanent, right?"
"Of course motivation isn't permanent. But then, neither is bathing; but it is something you should do on a regular basis."
The 24-hour rule allows you to look at each new day as a blank slate. Take along lessons from the past. You can learn as much -- or more -- from failure as from success. But don't live in the past. Build on what you know so that you don't repeat mistakes. Resolve to learn something new every day. Because every 24 hours, you have the opportunity to have the best day of your life.
For more information, please feel free to contact us: Phone:315.671.5478 Website: www.HodgkinsAndOHara.com Email: info@HodgkinsAndOHara.com Facebook: http://facebook.hodgkinsandohara.com/ Twitter: www. twitter.com/hodgkinsohara
The First Question You Should Ask Your Listing Agent
HEY All,
What do you think the first question you ask your Listing Agent is? Or what is the first question you asked your Listing Agent? Read below and give us your feedback. We'd love to hear your thoughts!
- Chip & Tom
The First Question You Should Ask Your Listing Agent
by The KCM Crew
What is the most important thing a seller should look for when hiring a real estate agent to sell their house? We are often asked this question. Is it the size of the company they are licensed with? Is it their marketing program? Their years experience in the business? Should you choose the agent who suggests the highest listing price?
There are many things that should be taken into consideration when hiring someone and giving them the responsibility for selling your home. In our opinion, the most important question you can ask a potential listing agent is a simple one:
Do you truly believe that now is a good time to buy a home?
Why should this matter when hiring someone to SELL your home? Buyers are nervous about purchasing right now. They want to know they are making an intelligent choice. We believe, especially in today’s market, you need to hire someone who realizes that this is one of the best times in American real estate history to buy. If an agent doesn’t believe that, how will they be able to convince a potential buyer to buy your home?
When interviewing a real estate professional, ask them to explain why purchasing a home makes sense today. They should be able to explain it simply and effectively. See how many of the following facts (which should be shared with every potential purchaser) the agent knows:
The Wall Street Journal last week stated:
“With home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today.”
Donald Trump was just quoted saying:
“I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”
John Paulson, a multibillionaire hedge fund operator and the investment genius who made a killing betting against housing a few years ago, is now bullish on residential real estate market. He recently said:
“If you don’t own a home, buy one. If you own one home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”
A recent Gallup Poll showed that 67% of American’s think that now is a ‘good time’ to buy a home. The Gallup Organization went on to say:
“Overall, there is good reason for most Americans to think now is a good time to buy a house. Interest rates remain near historic lows. Home prices are down sharply, providing many incredible buys.”
The iconic financial paper in this country, the country’s most famous real estate investor, the most successful prognosticator of the housing market and 2/3 of all Americans say now is the time to buy a home. Shouldn’t your agent agree?
Bottom Line
Selling is nothing more than the transference of conviction. How can agents transfer that conviction if they themselves are not convinced? Find a listing agent who truly believes that someone should buy your home – TODAY! This is the single most important thing you should look for in a potential listing agent.
For more information, please feel free to contact us: Phone:315.671.5478 Website: www.HodgkinsAndOHara.com Email: info@HodgkinsAndOHara.com Facebook: http://facebook.hodgkinsandohara.com/ Twitter: www. twitter.com/hodgkinsohara
Did You Know: Annual Rent Increases Make Home Ownership a Good Investment
By Danielle Hale, Research Economist, NAR
• According to the Consumer Price Index, tracked by the Bureau of Labor and Statistics (BLS), prices for the rent of a primary residence have increased at an average rate of a little more than 3 percent per year for the last ten years. The table below shows monthly, annual, and total rent over ten years assuming a 3 percent annual increase.
By contrast, a home buyer who locks in a thirty-year mortgage will have fixed mortgage payments. Buyers locking in a mortgage rate now have fixed payments at record low rates.
Of course, an average increase indicates what’s typical, but not every year will be typical. In 2009, when the prices of all items decreased by 0.4 percent, prices for the rent of a primary residence increased 2.3 percent across the US. The typical increase in all prices over the last ten years was 2.5 percent.
2010 looks to be another atypical year. All prices in the year ending September 2010 were up 1.1 percent while the price of rents in the same period rose 0.2 percent.
Consumer Price Inflation data is released by the BLS every month near the middle of the month. NAR tracks this and other inflations series in Inflation Watch, posted on Research’s Facebook Page.
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8 Tax Mistakes That Can Cost You
With the new year in full swing, you've probably begun piecing together your tax return. Maybe you haven't filled out a tax form yet, but you should at least have begun considering your strategies. Before you leap at some new tax-saving tip or take a daring shortcut, though, consider these tales of IRS ire.
Their pain can be your gain. Here are eight tax goofs your fellow readers have made, and tips for how you can avoid following in their missteps:
1. Was your debt forgiven? Report it as income.
In our sputtering economy, Americans are renegotiating credit card debt as never before. Yet many don't discover until later -- sometimes much later -- that in the view of the IRS, canceled debt from credit cards is income. "What we didn't know was that all the savings were considered income," one reader told us. "We were charged late charges and penalties."
Taxes: Fixing mistakes
Credit card companies report forgiven debt to the IRS on Form 1099-C (.pdf file). "You should receive a copy," says Tracy Coenen, a forensic accountant whose practice, Sequence, assists taxpayers with tax audits and tax fraud investigations.
Things get more complicated with mortgage debt, and you may want to talk with a tax expert if you have restructured your home loan. Coenen notes that canceled mortgage debt on your primary residence may be eligible for exclusion from income under the Mortgage Forgiveness Debt Relief Act, which applies to debt forgiven starting in 2007. The law remains in effect through 2012.
2. Report all your jobs.
Several readers admitted that they've forgotten to include some sources of income. One woman said she neglected to include her husband's $27,000-a-year job in 2008, and still owes a fine of $3,400. "I think this is just about as stupid as one can get!" she wrote. Another forgot about two weeks of work her husband put in for one company. Even though they filed for the correct amount once they got the W-2 Form, she wrote, "HUGE problem!"
3. A tax break for what? Don't get scammed.
If it sounds too good to be true, it probably is. One reader told of following up on a radio pitch that offered a tax credit for creating a website accessible to the blind. The company, also a tax preparer, set up a website for the reader -- for a fee. He said the cost of setting up the site was about equal to the tax break. Then three years later, he got a "fat envelope" from the IRS telling him he had to prove he had a legitimate website or pay the IRS $2,000. "I wrote them a check the next day."
4. Handle your Roth IRA with care.
Looking forward to tax-free income when you retire? That's the promise of a Roth IRA. Individuals who qualify can set aside after-tax income in the investment accounts, then withdraw the money (plus any investment gains) tax-free at retirement.
But such tax benefits don't come without restrictions -- including income limits on who can set up a Roth IRA. There are also complicated rules for how to convert a traditional IRA into a Roth IRA.
Such accounts have tripped up several of our readers. One said she improperly housed a Roth account inside an insurance vehicle. When she transferred the money out of the account, she had to pay a 10% penalty and count earnings as ordinary (taxable) income.
Another reader bemoaned the fact that he did not convert his traditional IRA into a Roth prior to 2010, when his income was particularly low and any taxes associated with Roth conversions could be spread over two years.
5. Don't let 'I do' undo you.
One woman told us that in the first year she was married, both she and her husband sent in tax returns, and both checked the "married filing jointly" status. They realized their mistake when the IRS sent them two refund checks. "It took nine months of writing and calling the IRS" to straighten things out, she recalled. "I still chuckle."
Another reader wrote that his wife claimed her son as a dependent the year after he got married. The rules for when you can claim adult children as dependents are complex, but marriage typically rules out the dependent tax break. "We ended up repaying the refund we got, as well as penalties," the reader writes.
Coenen says that a married, adult child can sometimes be claimed as a dependent on a parent's tax return if certain provisions are met. But the child can't also file a joint tax return with his or her spouse. "It is likely that the son in this case filed a tax return with his spouse, so the dependent exemption his parents attempted to take was later denied," Coenen says.
6. Was your student loan debt paid by your employer? Make sure the IRS knows.
If you're lucky enough to have your employer cover some of your student loan debt, don't forget the tax man. In the eyes of the IRS, it is pay and must be reported as income on your W-2. One reader, who assumed her employer had taken care of the arrangements, wrote on our Facebook page, "The Army gave me money towards a student loan and didn't hold back any taxes, I assumed they had, so now I'm paying the IRS back! Oops."
7. Don't be afraid to second-guess your tax preparer.
If your tax preparer's advice contradicts your past experience, get a second opinion from another preparer -- or, better yet, from the IRS. One reader spared us the details, but summarized her biggest tax mistake: "I listened to my tax preparer." About $25,000 in fines later, the reader said, "I should have checked with the IRS."
Another reader, who owns rental properties, missed out on deducting mileage for visiting the properties, as well as the cost of tools he used for repairs. He said he had his doubts, but he was in a rush, so he stuck with the advice of his tax preparer. He later confirmed that the deductions likely would have been allowed by the IRS.
8. If your taxes get complicated, consult a tax preparer.
This may sound like it contradicts tip No. 7. But many readers who told us about their dumb mistake said they regretted that they hadn't hired a tax professional. One reader messed up the paperwork for requesting a refund after moving to a new state. The mistake triggered an audit.
Another reader wrote: "Tax laws are constantly changing and there are deductions out there that you have no way of knowing about."
Ultimately, you are the one responsible for the accuracy of your income tax return. But a good tax preparer can save you time, money and headaches by fixing often silly and sometimes costly mistakes.
Credits: http://money.msn.com/tax-planning/8-tax-mistakes-that-can-cost-you.aspx
For more information, please feel free to contact us: Phone:315.671.5478 Website: www.HodgkinsAndOHara.com Email: info@HodgkinsAndOHara.com Facebook: http://facebook.hodgkinsandohara.com/ Twitter: www. twitter.com/hodgkinsohara
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