63011 Ballwin, MO.
829 Lilybud Ct, $102,900
832 Lilybud Ct, $108,000
160 Burtonwood Dr, $130,000
605 Vitry Dr, $157,700
1219 Brittany Parkway Dr, $163,000
2333 Forest Leaf Parkway, $205,000
200 Morewood Dr, $215,000
1526 W. Field Av, $225,000
320 Country Club Dr, $255,000
315 Claymont Cove Ct, $269,500
425 Tamarack Dr, $275,000
336 Glan Tai Dr, $319,900
725 Kerley Ct, $357,000
16520 Highland Summit Dr, $370,000
1348 Rusticview Dr, $385,000
528 Dartmouth Crossing Dr, $434,500
730 Clayton Corners Dr, $628,000
63021 Ballwin, MO.
159 Carmel Woods Dr, $78,500
28 W. Meadows Ln, $87,500
224 Victor Ct, $110,000
1220 Wicklow Rd, $118,000
200 Braeshire Dr #D, $130,700
278 Village Creek Dr, $137,000
676 Turfwood Dr, $150,000
1356 Holgate Dr #E1, $155,000
2375 Hidden Meadow Ln, $161,500
1635 Award Dr, $163,000
724 Woodrun Dr, $167,000
152 Cascade Circle Dr, $174,000
809 Ginger Wood Ct, $178,000
938 Oakwood Farms Ln, $199,900
405 Harvest Hill Ct, $225,000
1412 Cedar Bluff Dr, $235,000
345 Carr Manor Ct, $300,000
916 Kiefer Trails Dr, $325,000
287 Victoria Pointe Ct, $425,000 1
515 Dietrich Ridge Dr, $750,750
63026 Fenton, MO.
1407 Valiant Dr, $98,000 1
452 Noche Ln, $148,000
819 Spring Crest Dr, $215,000
17 Majestic Ct, $233,500
2050 Meramec Meadows Dr, $274,000
1223 Summerpoint Ln, $305,000
1025 Hawkins Bend Dr, $431,310
1347 Remington Oaks Terr. $318,000
2220 Fenway Farms Trail, $460,000
63123 Affton, MO.
9207 Reavis Barracks Rd, $45,300
6247 Pointview Ln, $73,000
9434 Dorisann Ct, $100,000
9315 Rambler Dr, $110,000
4842 Mohegan Dr, $111,856
6501 Horst Dr, $115,000
10133 Florinda Dr, $120,500
9410 Upland Dr, $126,000
5124 Lakewood Av, $127,000
4327 Hannover Cts, $130,000
9433 Sequoia Ct, $135,000
9401 Talbot Dr, $138,500
4736 Weber Rd, $140,000
4355 Mohegan Dr, $144,000
7934 Aldershot Dr, $145,000
9800 Chesterton Dr, $148,300
4465 Mohegan Dr, $149,000
9040 Amona Dr, $149,000
7114 Val Brook Ln, $149,850
7127 Fernbrook Dr, $155,000
8218 Fendale Dr, $160,000
7221 General Sherman Ln, $161,000
8301 Lonkar Dr, $161,500
821 Forman Rd, $165,000
63125 Lemay-Mehlville, MO
9606 Gentry Av, $52,000
1919 Mansard Dr, $57,000
420 Earlsfield Ln, $128,000
1803 Diane Dr, $145,000
63128 Mehlville, MO
5450 Cherryview Ln, $120,000
5506 Duchesne Parque Dr, $142,000
4737 Music Ln, $239,000
9853 Southwick Dr, $250,000
4911 Griffin Rd, $272,000
4742 Music Ln, $275,000
63129 Oakville, Mehlville, MO.
4380 Tavistock Circle, $33,000
1053 Humber Circle, $105,000
29 Kassebaum Ln #202, $129,900
2902 Parc Cheri Ct, $138,000
29 Kassebaum Ln #101, $142,850
3620 Kathleen Ann Dr, $146,000
447 Fairwick Dr, $146,000
634 Fairwick Dr, $149,900
5835 Bristlecone Ct, $186,000
2840 Bee Tree Ln, $190,000
2680 Queen Bee Ln, $250,000
729 Forder Crossing Ct, $250,000
773 Forder Manor Dr, $250,000
3108 Woodbridge Estates Dr, $261,000
5006 Southridge Park Dr, $324,900
6250 Olsen Ln, $400,000
Prices and address' from public records.
Tuesday, December 30, 2008
Monday, December 29, 2008
Is it time to Move Up?
These 6 questions will help you decide whether you’re ready for a home that’s larger or moving to a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.
1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.
2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.
3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district.
4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.
6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
If you think it may be time to move up or move out contact The H Team today for a free review.
Thursday, December 11, 2008
In A Buyer's Market Values Are Determined By Buyer's
While speaking with a new client yesterday, who is considering selling his house, a question/comment came up. As we were discussing com parables in the neighborhood he produced a print out of what he thought his home was worth.
I tried to explain to him the value of his home is determined by what a buyer is willing to pay in TODAY’s housing market, based on the comparison of the home in question with all of the others on the market, in the same neighborhood and others that had been sold that were comparable to his. I continued to explain what things did not affect the value of his home. After spending an hour with this gentleman I decided to make a list of items that do not effect the value of a home and create a list to include in my pre-listing packet;
What you paid for the house
Your remodeling costs
The amount of cash you need to buy your new house
What you want for your house
What I say your house is worth
What other real estate agents say your house is worth
What an appraiser says your house is worth
What the tax assessor said your house was worth
What Zillow says your home is worth
What Trulia says your home is worth
Your home is only worth what a buyer is willing to pay for it.
Since this fellows home was in a market area with a lot of foreclosures his potential price prohibited him from placing it on the market at this time.
I tried to explain to him the value of his home is determined by what a buyer is willing to pay in TODAY’s housing market, based on the comparison of the home in question with all of the others on the market, in the same neighborhood and others that had been sold that were comparable to his. I continued to explain what things did not affect the value of his home. After spending an hour with this gentleman I decided to make a list of items that do not effect the value of a home and create a list to include in my pre-listing packet;
What you paid for the house
Your remodeling costs
The amount of cash you need to buy your new house
What you want for your house
What I say your house is worth
What other real estate agents say your house is worth
What an appraiser says your house is worth
What the tax assessor said your house was worth
What Zillow says your home is worth
What Trulia says your home is worth
Your home is only worth what a buyer is willing to pay for it.
Since this fellows home was in a market area with a lot of foreclosures his potential price prohibited him from placing it on the market at this time.
Tuesday, December 09, 2008
How the Tax Credit Works
The First-Time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on july 30, 2008 and targets any individual that hasn't owned a home for at least three years. Taxpayers can take the credit on their 2008 tax return if the purchase was made after April 9, 2008
It's worth up to $7,500 and can be taken in a single tax year.Authorization for the tax credit ends July 1, 2009 so if you wait to buy until after the first of the year you can take the tax credit on your 2009 return.
The actual credit amount is set as a percentage of the home purchase amount. That perccentage amount 10 percent of the purchase price credited against your tax liability up to the $7,500.
Income levels are $75,000 for individuals and $150,000 for households. Individuals who income exceeds the $75,000 limit but isn't more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it's a primary residence and is in the USA.
Contact your professional tax advisior as to your eligibility. The H Team can help you find a new home.
It's worth up to $7,500 and can be taken in a single tax year.Authorization for the tax credit ends July 1, 2009 so if you wait to buy until after the first of the year you can take the tax credit on your 2009 return.
The actual credit amount is set as a percentage of the home purchase amount. That perccentage amount 10 percent of the purchase price credited against your tax liability up to the $7,500.
Income levels are $75,000 for individuals and $150,000 for households. Individuals who income exceeds the $75,000 limit but isn't more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it's a primary residence and is in the USA.
Contact your professional tax advisior as to your eligibility. The H Team can help you find a new home.
Friday, December 05, 2008
First-Time Home Buyer Tax Credit
Frequently Asked Questions
About the First-Time Home Buyer Tax Credit
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the $7,500 tax credit?
What is the definition of a first-time home buyer?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
Does the credit amount differ based on tax filing status?
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
I heard that the tax credit is refundable. What does that mean?
What is the difference between a tax credit and a tax deduction?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Why must the money be repaid?
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.
Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
About the First-Time Home Buyer Tax Credit
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the $7,500 tax credit?
What is the definition of a first-time home buyer?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
Does the credit amount differ based on tax filing status?
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
I heard that the tax credit is refundable. What does that mean?
What is the difference between a tax credit and a tax deduction?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Why must the money be repaid?
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.
Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
Thursday, December 04, 2008
10 Tips to Avoid Foreclosure
As everyone knows foreclosure rates are up all across the US. Each month more than 250 families are foreclosed on. There is help, but most families are not acting fast enough. It is imperative that you ask for help as soon as you see trouble. These tips are provided to educate homeowners who are facing foreclosure.
Should you find yourself getting behind on your mortgage payment ACT NOW
1. Don't Ignore The Problem The further you fall behind the tougher it will become to reinstate your loan and the higher the chance of losing your home.
2. Contact Your Bank/Lender As soon as you realize you have a problem. The bank/lender does not want your house. They have options to help borrowers through tough times.
3. Open And Respond To All Mail From Your Lender Normally, the first notices contain good information about foreclosure prevention options to help get you through a tough financial period. later mail may include information about impending legal actions. Failure to open your mail is not an acceptable excuse in foreclosure court.
4. Know Your Mortgage Rights Locate your mortgage documents and read them so you know what your lender can do if you can't make your mortgage payments. Learn about foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand Foreclosure Prevention Options Valuable information about foreclosure (also called loss mitigation) can be found on the Internet at www.fha.gov
6. Contact A Non Profit Housing Counselor The Us Department of Housing Urban Development funds free or very low cost housing counselors nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need assistance.
7. Prioritize Your Spending After health care keeping your home should be your main priority. Review your spending and see what you can cut spending to make your mortgage payment. Look for optional expenses, like cable, health club memberships, entertainment you can eliminate. Delay payments on unsecured debt such as credit cards until you have your mortgage paid.
8. Use Your Assets Do you have a second car? Whole Life insurance with cash value? Items you can sell to help reinstate your loan. Can a member of the household get a second job? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices in order to keep your home.
9. Avoid Foreclosure Prevention Companies for-profit companies will contact you promising to negotiate with your lender a plan to work out your loan. While these may be legitimate business' they will charge you a hefty fee (up to 3 months of your monthly mortgage) for providing information and services your lender or a HUD approved housing counselor will provide for free if you contact them. You don't need to pay money for help- use that money towards your mortgage instead.
10. Don't Lose Your Home To A Foreclosure Recovery Scandal If any firm claims they can stop foreclosure immediately if you sign a document appointing them to act on your behalf, you could be signing your home over to them and becoming a renter in your own home. Never sign a legal document without reading it or understanding it. Always get professional legal advice from an attorney, a HUD approved housing counselor or a trusted real estate professional.
To find out more about HUD approved housing agencies and their services go to www.hud.gov or call toll free 1 800 569-4287 weekdays between 9 AM and 5 PM Eastern Standard Time. You can receive the three closest housing counselors nearest you.
Good Luck. This information provided by The H Team a professional team of Realtors serving the St. Louis area. Experienced Loss Mitigation and Short Sale specialists.
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