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Repeat Homebuyer Tax Credit Creates Questions - 2009-12-13 |
If you read this column on November 29, then you saw my overview of the new Repeat Homebuyer Tax Credit. It's the new one, available to those buying a replacement residence by April 30, 2010. The credit amounts to 10 percent of your purchase price, up to a maximum of $6,500, and only applies to purchases of $800,000 or less. In addition, the credit is phased out for taxpayers whose income exceeds certain limits.
Because it comes on the heels of the extended First Time Homebuyer Credit, it has generated a lot of questions from my website. So here are some specific questions and answers:
Q: What is a "Repeat Homebuyer"?
A: Under IRS rules, you must have owned and occupied a home as your principal residence for at least five of the eight years immediately preceding your qualifying purchase. Your qualifying five year residence must be your most recent owned principal residence, meaning you may not have owned an intervening residence for less than five years and still qualify.
Your repeat purchase must be made between November 6, 2009 and April 30, 2010. If you have a valid purchase contract by April 30, you may close as late as May 31, 2010.
Q: If I live in a rental house in Atlanta, but have owned a vacation home at the beach for many years, will that qualify?
A: No, because the vacation home is not your primary residence. Your "principal residence" is usually the one where you spend the most nights per year, but there are other factors the IRS may consider, such as where you register to vote and the address on your drivers license.
Q: If I buy a qualifying replacement house and occupy it as my primary residence, am I required to sell my former principal residence?
A: No. There is no requirement that you sell. So you might choose to convert it to a rental property, or keep it as a secondary residence.
Q: Does my replacement residence have to be a traditional house?
A: Not necessarily. A condo or townhouse could qualify, as could a boat, a motor home, or even a trailer. It must have a kitchen, sleeping quarters and bathroom facilities.
Q: I heard that I am required to reside at the replacement residence for at least 3 years. What happens if I have to move?
A: The amount of your entire tax credit will be added to your Federal income tax liability in the year that you move. In other words, you have to give it all back.
Q: My neighbors and I have owned and resided in our respective homes for more than five years. Can we simply swap houses and still qualify?
A: Yes. I would recommend written sales contracts and a traditional closing, but there are no restrictions on neighborly purchases. However, you may not purchase your replacement residence from a lineal ancestor or descendant, including grandparents and grandchildren.
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Upcoming Events
"EPA CERTIFIED RENOVATOR" TRAINING
Do You Work with Real Estate? You Must Be LEAD SAFE CERTIFIED as of April 22nd.
To all owners, realtors, investors, property managers, contractors, electricians, plumbers and painters. Do you ever engage in any level of renovation? If so, read this:
Any renovator, from owners to contractors, from plumbers to electricians to painters, who disturbs lead paint while working in a pre-1978 home, school or day care center, now must be Lead-Safe Certified. If you’re not, you can face tens of thousands of dollars in fines. Plus, you put the health of yourself, your workers and your customers at risk, which could result in lawsuits. One simple 8 hour class certifies you for five years. It’s that easy.
Since April 22, 2010, there are new Federal rules regarding how you perform any work that disturbs lead-based paint in homes, child-care facilities and schools built before 1978. You now must be EPA certified and follow specific work practices to prevent lead contamination.
Failure to follow the new rules can result in federal fines of up to $32,500 per day or up to 5 years in federal prison, or both. Don’t take a chance - it’s not worth it.
How To Become an EPA Certified Renovator:
In just one day, John Adams will teach you how to meet all EPA requirements and become an “EPA Certified Renovator.”
Don’t wait - register now! Click on “Seminars” and choose your day!
- Friday, July 30th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 06th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 13th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 20th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 27th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
Total Course Cost: $295, includes exam and EPA-HUD 400 page manual
Space is limited to 20 participants.
Training services provided by Seagull Environmental Management Co, Inc.
Courses are approved for purposed of certification under Section 402 of TSCA for the Certified Renovator.
This course has been approved by the Georgia Real Estate Commission for 7 hours of Real Estate Continuing Education
For more information, call toll-free 888-373-0029
Click above on the "Seminars" button to register
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John Adams Presents
“The MetroVestAtlanta.com REO Bus Tour”
Get on the bus for a tour of South DeKalb County’s “Real Estate Owned”
homes. Each house you visit will be available that day for purchase at
a giveaway price, regardless of current condition. Financing is
available!
Throughout the day, we will hear from mortgage providers, people in the
construction business and property managers all discussing today’s
situation with Bank Owned REO properties.
Who Should Attend: Investors, Realtors, Lenders, Prospective Buyers, and
anyone who might want to buy a super-bargain house and either do the
rehab themselves or have all the work performed by the pros.
You will see abandoned dumps and finished products, and everything
in between. And Snap will be there to answer all your questions and
explain the rehab and rental strategies.
Saturday, August 21st, 9:30 AM to 4:00 PM
Your $49 fee includes the bus tour and lunch. You must make reservations. No walk-ups.
There is limited seating and the seats are filling fast. ACT NOW before you miss the bus.
We will be meeting at Suburban Plaza, 2643 N. Decatur Road and Church Street, Lower Level, Decatur 30033 (beneath Hancock Fabrics, in the arcade.)
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