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New IRS Information on Home Buyer Tax Credit
Posted by: | CommentsImportant IRS updates on claiming the home buyer tax credit have recently been announced. The agency has published an updated version of Form 5405 as well as instructions for home buyers using it to claim the $8,000 first-time buyer credit as well as repeat buyers seeking to claim the $6,500 credit. Updates to the form include the extended purchase date window (tax credit-qualified homes must be under contract prior to May 1 and close before July 1). And yes, even though the revised Form 5405 still references the “First-Time Homebuyer Tax Credit,” it is also intended to be used by repeat home buyers, who must have lived in a single principal residence for five of the last eight years prior to purchasing their new home for which they plan to claim the tax credit.
Beyond these updates, the IRS is also requiring additional documentation for home buyers who claim the credit for purchases after Nov. 6, 2009. Buyers must now provide a copy of the HUD-1 form or, in cases where that form is not used, a certificate of occupancy for a newly constructed home. For purchases taking place after April 30, a copy of the signed sales contract must also be supplied. Meanwhile, in order to claim the $6,500 repeat buyer tax credit, home buyers must attach one of the following for five consecutive years of the last eight to demonstrate that they meet the repeat buyer qualifications: a Form 1098 reporting mortgage interest; a property tax statement; or home insurance records.
Tax credit buyers should also know that, due to the new documentation requirements, those claiming either the $8,000 first-time home buyer credit or the $6,500 repeat-buyer credit cannot e-file. As a result, taxpayers should be prepared to wait at least 12 to 16 weeks to receive their refunds. On a final note, NAHB has recommended options to Treasury and IRS officials for homebuyers who do not use a HUD-1 form and whose local jurisdiction does not issue a certificate of occupancy. We are awaiting their response at this time. Get more information on NAHB’s consumer tax credit Web site at: www.federalhousingtaxcredit.com.
Housing Tax Credit Extended and Expanded
Posted by: | CommentsWho is Eligible
- First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
- Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
- All U.S. citizens who file taxes are eligible to participate in the program.
Income Limits
- Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
- For married couples filing a joint return, the combined income limit is $225,000.
- Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
- The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.
Effective Dates
- The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.
Types of Homes that Qualify
- All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.
Tax Credit is Refundable
- A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
- For example:
- A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).
- A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
- All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.
Payback Provisions
- The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
The www.federalhousingtaxcredit.com site is being updated. Please check the site next week for more detailed information on the new tax credit!
Hansen & Horn Oktoberfest aids homelessness
Posted by: | CommentsJoin the REALTOR Foundation at Hansen & Horn’s residential development at Anson for an evening of food, friends and fun on Wednesday, October 7 from 5:30 to 7:30 p.m. A minimum $10 donation at the door includes: silent auction, authentic German fare, and live German music & entertainment.
All proceeds help the Foundation’s fight against homelessness in our community.
RSVP to mollyhahn@realtorfoundation.com.
Denny Smith’s “Investing Sense” live from New Home Tour
Posted by: | CommentsStop by Home #6 by Estridge Companies between noon and 3 p.m. this Saturday, April 25, to meet Denny Smith as he broadcasts his popular WIBC radio program “Investing Sense” live from the New Home Tour. Show information and online tickets are at www.IndyNewHomeTour.com.
With more than 35 years as a businessman in the Indianapolis area, Denny Smith has the experience and background to be the one who guides WIBC listeners with their financial questions.
Denny, who operates The Mutual Fund Store in Indianapolis, is a graduate of Speedway High School and Marion College. He is a Registered Investment Advisor who has also earned the designations of CRPC (Chartered Retirement Planning Counselor) and CMFC (Chartered Mutual Fund Counselor) from the College of Financial Planning.
Before opening his investment business, Denny owned and operated a well-known local plumbing company. He also directed the multi-state plumbing operations of a national mechanical firm. He has always been in the business of business and finance, and for many years he has been a speaker and instructor nationwide for both business and investing.
$8000 Tax Credit for First-Time Homebuyers Available Now
Posted by: | CommentsCredit Offers Up to $8,000 to Qualifying Taxpayers Now
Washington, DC – In an ongoing effort to deliver on swift implementation of the Obama Administration’s recovery, stability and affordability plans, the U.S. Department of the Treasury touted today the availability of an expanded tax break for first-time homebuyers – a provision under the American Recovery and Reinvestment Act of 2009 that will make up to $8,000 available now to qualifying taxpayers who buy homes this year.
First-time home buyers represent a significant portion of existing single-family home sales. In 2008, nearly one out of every two homebuyers were buying for the first time, and the expansion in the first-time homebuyer credit will make it easier for first-time home buyers to enter the housing market this year.
“The expansion of the first-time home buyer tax break as part of the President’s recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers,” said Treasury Secretary Tim Geithner. “We view our economic recovery plan, our financial stability plan and now this homeowner affordability plan as three legs of the same stool – an integrated whole that represents our immediate response to the current crisis. We remain committed to swift, efficient and effective implementation of all of these components.”
The announcement comes on the heels of the first Recovery Plan Implementation meeting led by Vice President Joe Biden at the White House this morning; Secretary Geithner was among several Cabinet secretaries to attend and offer updates on implementation efforts in progress at Treasury and its bureaus. Vice President Biden is overseeing the Administration’s implementation of the Recovery Act’s provisions.
The Internal Revenue Service (IRS) has posted on IRS.gov a revised version of Form 5405, First-Time Homebuyer Credit to incorporate provisions from the American Recovery and Reinvestment Act. Under the new law, qualifying taxpayers who buy a home this year before December 1 can claim up to $8,000, or $4,000 for married individuals filing separately, on either their 2008 or 2009 tax returns. Unlike the prior first-time homebuyer credit, this is money individuals do not need to pay back.
To view the form and additional information on who can and cannot claim the credit, income limitations and repayment of the credit, please visit IRS.gov or go online to www.FederalHousingTaxCredit.com
Builders Association Award Winners Announced
Posted by: | CommentsThe Builders Association of Greater Indianapolis (BAGI) named its highest recognition award winners during the 44th annual Janus Ball held January 17, 2009 at the Indiana Roof Ballroom.
Winners were:
Builder of the Year: Pete Gray, Executive Homes Construction Inc.
Builder of the Year is presented to an individual builder member who has worked diligently on behalf of the industry and the association over the past year.
Gray has been in the industry for well over 15 years and has been a member of BAGI since 1997. In October, he was re-elected to the BAGI Board of Directors. He previously served on the Board from 2001 – 2007; serving as the Association’s President in 2006.
Since joining BAGI, his company has participated in many Home-A-Ramas including the shows in 1999, 2001, 2003, 2006 and the 2008 show at the Willows in Zionsville – where Executive Homes received the People’s Choice Award.
He is currently a member of the Hamilton County Builders Council and Building Partners of Central Indiana.
Associate of the Year: Randy McKnight
This award is presented to an individual associate member who has returned significant time and service to the industry over the past year.
During 2008, McKnight was a member of the Hendricks County Council and the Johnson County Council…but was most active with Hamilton County Council. There he served on the Board of Directors; was a member of the golf committee; and was council representative to the Hamilton County Habitat for Humanity Board of Directors.
In addition to his council involvement, McKnight was very active with BAGI. He is a member of the BAGI Board of Directors serving as Treasurer in 2009. From Board meetings to general membership meetings-he was always ready to help. He took his responsibility as Home-A-Rama Committee Chairman very seriously spending countless hours onsite before and during the show making sure everything ran smoothly. This past year, in addition to chairing the meetings this event requires, he found time to travel to Cincinnati’s home show with the BAGI staff in an effort to find ways to improve the show.
Esprit de Corps: Micah Hill, The Re-Development Group
This award is given to someone who embodies the “Spirit of the Troops.” It is presented to an individual who has demonstrated outstanding member involvement and who has become involved within the last three years.
Since becoming active with BAGI in 2006, Hill has maintained a steady level of involvement.
As Co-Chairman on the BAGI Green Committee, he has been proactive in establishing the mission statement, the committee objectives and in developing talking points used by the Association and its members as it relates to green building initiatives and sustainability. During 2008, he spent many hours presenting on behalf of the Committee at Council meetings, a BAGI Board of Directors meeting and to the Indiana Land Use Consortium.
Hill is also very active in the Building Partners of Central Indiana group. For this organization, he serves on the Board of Directors and as Chairman of the Vendor Committee.
Mike Boeke Outstanding Service Award: Jeff Scripture, Harrison & Moberly
The award bears the name of the late Mike Boeke of Davidson Industries whose daily devotion and service to the industry, community, and association was always above and beyond the call of duty.
This award follows Scripture’s previous Association recognition, as the first ever Esprit de Corps winner in 1997 and as Associate of the Year in 2000.
His industry involvement started at the county council level where he served as past president of the Hancock County Council as well as serving on their economic development, government affairs, and public relations committees.
A member of the BAGI board of directors since 1998, he was board secretary for two years and most recently served as parliamentarian. His BAGI committee involvement includes the Builder Standards, Economic Development, Nominations and Governance, Strategic Planning, Membership, and Political Action Committees.
Scripture’s involvement with the Indiana Builders Association includes parliamentarian, member of the Executive Committee, state director, board member of the Housing Protection Fund and member of the Land Use Committee.
Firm Foundation Award: WTHR-TV 13/Video Indiana
This award is presented to a BAGI member firm that has demonstrated commitment to the building industry through its involvement with the Builders Association of Greater Indianapolis.
WTHR-TV 13 has been a member of the Builders Association since 2004 and during this time, they have been instrumental in increasing consumer awareness of the Builders Association and its members.
For the last several years, WTHR has been the exclusive television media partner for the Quality Assurance Builder Standards message, the Parade of Homes and Home-A-Rama. Through this partnership, BAGI has been able to maximize its media and event exposure. In addition, WTHR has made available top marketing experts to the Association and continues to strive to understand and assist in reaching BAGI’s strategic plan objectives. They have developed the New Homes and Communities website and prominently feature Association news on the Homes Central section of WTHR.com. Day in and day out, the staff of WTHR continues to find new ways to extend the Association’s message both on-air and online.
This year’s Janus Ball was sponsored by Citizens Gas, Best Cabinets, Indianapolis Power and Light, Frost Brown Todd Attorneys, Airtron, M/I Homes, Bedrock Builders, Indiana Geothermal, Speedway SuperAmerica, and Vectren Energy Delivery.
The Builders Association of Greater Indianapolis is a professional trade association representing residential homebuilders. For more information call 317-236-6330 or visit www.BAGI.com.
