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Thread: 2009 First Time Homebuyer Tax Credit

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    God/dess Zofia's Avatar
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    Default 2009 First Time Homebuyer Tax Credit

    First and foremost, this is a tax credit, not a deduction. That is great news! More great news, home prices are lower than they have been in years. New home construction is at a remarkably low pace. In other words, while home prices may fall a little more, there is a lot of upside potential. Conversely, rents have held steady, at least where I live. If you have the down payment, or even if you have to scrounge it from parents/relatives this is a good time to buy a home and Uncle Sam is making it even better.

    Here's how the credit works:

    For eligible first-time home buyers who purchase a home on or after Jan. 1, 2009 and before Dec. 1, 2009, the first-time home buyer tax credit is now $8,000 and unlike eligible first-time home buyers in 2008, the qualified 2009 first-time home buyer no longer has to repay the credit unless the homeowner sells or moves out of the home within 3 years of purchase. This is BIG!

    The tax credit is 10 percent of the purchase price of the home with a maximum credit of $8,000. The $8,000 credit begins to phase out for individuals with MAGI (modified adjusted gross income) over $75,000 and at $150,000 for married couples filing jointly. It is fully phased out for individuals with MAGI of $95,000 and at $170,000 for joint filers, half that amount for married persons filing separate returns.

    Qualifications
    In addition to income requirements for eligibility of the first-time homebuyer credit, there are some other things you should know to qualify for the credit:
    • You (and your spouse, if married) cannot have owned a home in the three years prior to a purchase
    • You cannot purchase your new home from a close relative including spouse, parent, grandparent, child or grandchild, though the purchase of a home from a sibling (brother or sister) does not disqualify you from claiming the credit; purchases from step-relatives are allowed for the credit as well
    • You must purchase the home beginning Jan. 1, 2009 and before Dec. 1, 2009; for a home under construction, you must occupy the home before Dec. 1, 2009
    • The home must be your principal residence; rental property and vacation homes do not qualify for the credit
    • You are not eligible for the credit if you are a nonresident alien; for married couples filing jointly, one must be a U.S. citizen to qualify for the credit
    • The credit does not apply to homes purchased and located in the U.S. Territories
    • If you owned a principal residence outside of the U.S. within the last 3 years, and meet the other requirements, you are eligible to claim the first-time home buyer credit for a home purchase in the U.S.

    As with any financial decision that has tax implications, the best advice is to always talk with your tax professional to determine a course of action that may be best for your individual financial situation.

    HTH
    Z

    Disclosure under IRS Circular 230: To insure compliance with recently released Internal Revenue Rules, this communication was not written or intended to be relied on to avoid federal tax related penalties or for promoting, marketing or recommending to any party any tax related matters addressed herein.

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    God/dess threlayer's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Does the credit apply retroactively if the participant does not pay income taxes to the extent of the credit, that is cannot fully take the credit against 2009 income tax? <For example, say a person qualifies and the credit is $6000, but income taxes are only $3000; can the excess credits be applied to the 2010 tax year (when the return is filed in 2011)?>

    ----
    Comment: a lot of conservatives decry this credit as yet another fed giveaway for which the rich are paying for the tax credits. I suppose they don't quite understand the definition of stimulus. The housing market needs to be pulled up before banking and other credit making will resume fully. The housing market is like the kingpin in a stone archway.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Banned Melonie's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Yes this is a refundable tax credit ! So just like the earned income tax credit, the IRS will send out a check for more dollars than the person actually paid in !

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    Default Re: 2009 First Time Homebuyer Tax Credit

    Damn I wanna buy a house so bad this yr but hey maybe next yr.

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    God/dess Gia2608's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Depending on where you ive (like ME!) prices may continue to drop. This tax credit will most likely be renewed next year.

    Also, there are gov't grants on top of this, for instance some cities in S. Fla will give you up to $40,000 as a down payment as part of the SHIP program.

    The new HUD program only requires a 650 credit score and a 3% or so down payment.

    I have done extensive research on this and am working on it personally but if anyone has any q's that I may be able to help with, feel free to PM me.
    XoXo Gia
    Danielle Fishell (the Dish): "If the Super-Star thing doesn't work out, Gia makes a great stripper name"

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    Default Re: 2009 First Time Homebuyer Tax Credit

    oK thanks Im working on the credit thing actually.

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    Banned Melonie's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    again not wanting to swing more than 50% towards the political, but the same sort of gov't policies that are responsible for the first time home buyer tax credit are also responsible for REDUCING new home sales. The reason of course is that the gov't has been 'borrowing' unprecedented amounts of money to fund this and other 'stimulus' programs, the Chinese / Japanese / European lenders ( actually treasury bond buyers ) are beginning to worry about America's ability to pay back these debts, interest rates on long term bonds must therefore be increased, thus interest rates on new mortgages must increase, thus fewer would-be buyers can qualify for a new mortgage given a stagnant (or falling ) income but a higher monthly payment !

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    Default Re: 2009 First Time Homebuyer Tax Credit

    where i live, 8k as a tax credit is laughable when home prices are 600k+ and rents are 1500-2000 for a 3bd house with 2 car garage and lawn care by the owner included in the rent.

    artificially inflating housing prices with a goofy tax credit scheme and handing out houses to people with crappy credit and no money doesn't really strike me as a smart way to jazz up the sagging economy long-term.

  9. #9
    AudreyLeigh
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by miabella View Post

    artificially inflating housing prices with a goofy tax credit scheme and handing out houses to people with crappy credit and no money doesn't really strike me as a smart way to jazz up the sagging economy long-term.
    I dont know where you live but along with the tax credit came a new appraisal system. The new appraisal system means all homes are independantly appraised rather than the bank appraising and inflating prices. ALL homes here (including REOs) are coming in very low. The house Im buying came in $15k under asking (and under comps) and my dad (my agent) has had homes come in $60-70k under - these are $350-400k homes (or at least they were)... so I dont think this $8k is inflating anything.

    Zofia - You should post a link to the tax forms to ammend your 2008 taxes and take the credit in 2009. (I need that.. lol)

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    Senior Member Axiom's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Actually there is talk of a 15K tax credit after the 8K expires. They are trying to make the 15K available to everyone, not just first time home buyers.... keep your fingers crossed

  11. #11
    AudreyLeigh
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by Axiom View Post
    Actually there is talk of a 15K tax credit after the 8K expires. They are trying to make the 15K available to everyone, not just first time home buyers.... keep your fingers crossed
    I highly doubt this is going to happen. I've been following this closely...

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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by AudreyLeigh View Post
    I highly doubt this is going to happen. I've been following this closely...

    I'm just hoping it will

  13. #13
    AudreyLeigh
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by Axiom View Post
    I'm just hoping it will
    Me too... I close on my house at the end of the month and would love $15k.. which is why I have been following it.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    where i live home prices have actually risen slightly after falling about 20% overall, and the rise is...approximately 5-10k.

    i live in the seattle area, which has a long way to go before homes are reasonably priced again, and the tax credit thing is temporarily spiking prices, which will further delay the necessary drops.

    meanwhile one can rent a seaside palace that is on offer for 5 million for 2500/month, which makes buying on account of an 8k or 15k credit seem even more silly in this inflated bubbilicious area.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    Well I live in the south where 4 bd room house that started out at 200k are now 80k. Thats 8k would do me really well down here.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    The only additional comment I would offer is that the cost of home ownership consists of many components, with initial purchase price / down payment requirement being only one component. Yes the first time home buyer 'subsidy' payment obviously helps in this regard.

    However, the first time home buyer 'subsidy' payment does nothing to help with the 'ongoing' costs of home ownership. The largest of these is obviously home mortgage interest rates, which are rising. But running strong second and third are local property tax rates (which are rising incredibly fast as local gov'ts try to make up for falling sales tax revenue and increased social services costs), as well as home energy costs (which may take a huge jump as the result of the Carbon Tax bill).

    Over the 30 year life of a home mortgage, property taxes and energy costs may indeed overshadow mortgage payments. And regardless of the inflation possibility, homeowners who are squeezed by rising property tax payments and rising home energy payments versus relatively stagnant incomes (adjusted for inflation) or falling incomes ( as a result of job loss, taxation of health care benefits, rising state income taxes, whatever ) will fall behind in their mortgage payments. This in turn will result in foreclosures, and ultimately to depressed real estate prices (again adjusted for inflation).

    There is also speculation from some quarters that IRS tax policy i.e. the future deductibility of home mortgage interest payments from federal income tax liabilities could be eliminated. Like similar discussions regarding ending the IRS tax deduction for medical expenses / medical insurance, this is certainly a possibility as the US gov't becomes more and more desparate for sources of tax revenue. The elimination of home mortgage interest tax deductions would also be likely to receive a lot of political support, since it basically amounts to a 'middle class' subsidy that is not shared by the poor. If this were to ever happen, housing prices could be devastated at the same time that 'out of pocket' net costs of home ownership would instantly increase by the amount of the eliminated home mortgage interest tax deduction savings. And in taking on a 30 year mortgage, you're essentially taking a risk that the gov't won't 'change the rules after the game is already underway'.

    When looking at the 'appreciation' of real estate values over time, just like the 'appreciation' of stock market indexes over time it is not enough to simply say that the home doubled in price over the past 10 years. In order to make a 'smart' comparison, it is also necessary to evaluate the 'purchasing power' of the US dollars the home or stock index are priced in 10 years later. If the US dollar has been devalued such that 10 year old dollars were worth 2.5 times as much in terms of 'purchasing power', then the apparent doubling of real estate prices and stock index prices over the same 10 years is actually a LOSS !!!


    Real estate prices in straight US dollars ...



    Versus 'purchasing power' loss of those US dollars ...



    ~
    Last edited by Melonie; 07-11-2009 at 01:17 PM.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by AudreyLeigh View Post
    I dont know where you live but along with the tax credit came a new appraisal system. The new appraisal system means all homes are independantly appraised rather than the bank appraising and inflating prices. ALL homes here (including REOs) are coming in very low. The house Im buying came in $15k under asking (and under comps) and my dad (my agent) has had homes come in $60-70k under - these are $350-400k homes (or at least they were)... so I dont think this $8k is inflating anything.

    Zofia - You should post a link to the tax forms to ammend your 2008 taxes and take the credit in 2009. (I need that.. lol)




    I think this is what your looking for....... my friend andher husband just bought a house and there closing on July 27 there agent is supposed to be helping them with this process.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    ^^ Yeah, well we've had the Second World War, the Korean War, the Vienam (War), some inflationary periods after that. All that corrodes is not gold. The world changes in spite of whether we want it to or not. Our choice is to live with it, or pout about it all the rest of our lives. In spite of allthat inflation, isn't it remarkable that our living standard is actually considerably HIGHER?
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    ^^^ arguably, the American standard of living has been declining since the 'dot-com' peak of 1999. And this is despite the fact that both 'mom and dad' have been working full time. By objective measure, with the effects of mom entering the workforce and US dollar loss of 'purchasing power' compensated for, the American standard of living has been declining since the late 1950's and has been declining rapidly since the late 70's.

    Arguably, there are two exceptions. The first are the 'uber-rich', who have been able to enjoy ever increasing earnings ( as long as their accountants make proper arrangements to shield most of those earnings from taxes). The other is social welfare benefit recipients, who have experienced not only 'inflation adjustments' to their benefit levels, but also new benefits ( such as partial assistance with utility bills)

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    Default Re: 2009 First Time Homebuyer Tax Credit

    If you mean by standard of living that both partners have to work, maybe it has. But if you mean that the family standard of living has decreased, except for recently with the latest regulatory disasters, no. WE are healthier, can do less hard labor, eat better, enjoy our lives more, socialize more, and have more free time than ever before. If you mean save more money, that has gone down too; we have not been saving much for a long time. But that has been by choice to accumulate lots of toys, take vacations, and enjoy life a little too much for our real standard lf living.

    In spite of entitlements for whom you seem to call the unentitled, our 'apparent' standard of living is considerably higher in the nineties than ever before that. What is beyond the apparent are 'hidden' hazards like biohazards, nuclear proliferation, national (and world) debt, deforestation, tax proliferation (variety of new taxes), uncontrolled immigration, ethnic wars and genocides, terrorism of the populace, wasting/spoiling of croplands, lack of diversity of food sources and types, overpopulation, destruction of wildlife diversity, and dozens of others. These are some of the things will begin to bite us hard in our collective asses in this century.

    As I say money is not the measure of our civilizarion's well-being. It is merely a tool for distributing the exchange of goods and services. But it does not protect us against our excesses and self-made hazards.
    Last edited by threlayer; 07-15-2009 at 08:12 AM. Reason: misplaced conjunctions
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  21. #21
    AudreyLeigh
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by BLicious! View Post
    [/b]



    I think this is what your looking for....... my friend andher husband just bought a house and there closing on July 27 there agent is supposed to be helping them with this process.
    Thanks. Thats funny - we close the 27th too... their agent is helping them with tax forms? I don't trust my agent that much! Of course my agent is my dad so I know him well enough to say that.

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    Featured Member minnow's Avatar
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    Default Re: 2009 First Time Homebuyer Tax Credit

    Quote Originally Posted by Melonie View Post
    <<big snip>>


    Real estate prices in straight US dollars ...



    Versus 'purchasing power' loss of those US dollars ...



    ~
    Interesting Mel treatise, and graph. Graph fails to take into account that average house size has increased over time, and there's a lot more "accesories/ standard equipment since the 1890's. (If I'm not mistaken, air conditioning was invented in the 1910's, but really didn't become widespread in houses until several years after WW2. ) So, from historical perspective, current bang for $$ isn't as bad as chart initially seems.
    I'm right 96% of the time. I don't sweat the other 5% .......................

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    Default Re: 2009 First Time Homebuyer Tax Credit

    ^^ In spite of your explanation that s an INCREDIBLE spike in housing prices.

    I wasn't even looking to buy/sell and I noticed it very easily. I know a bull market can turn on you in a second. The securities phrse for this is - "a bull market climbs a wall of worry". But with securities you can buy/sell completely in just three days. In housing you can't even get listed or take delivery of an offer in three days.

    You really have to take a long-term look at housing yourself. I know of no real estate agents or loan officers warning people about the bubble. WHY???
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: 2009 First Time Homebuyer Tax Credit

    I know of no real estate agents or loan officers warning people about the bubble. WHY???
    A - because real estate agent receive commissions and banks earn loan origination fees based on the sale price only

    B - because all future default risk for 99% of new mortgages falls to the US tax payer rather than bank stockholders ( via Freddie / Fannie resale )

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    Default Re: 2009 First Time Homebuyer Tax Credit

    ^^ I assume "B" is derived from the exploded housing bubble. But I was talking before the explosion when housing costs were elevating faster than a Jupiter first stage rocket from NASA--with NO apparent reasons other than speculation.

    People have been told for eons that real estate is "safe." Goes to show that popular beliefs can easily be wrong if one doesn't follow natural instincts to THINK. Bubbles are just as hazardous to your investment as are earthquakes, hurricanes, floods, brush/forest fires, termites, mold, sink holes, beach erosion, and eminent domain.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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