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sanramonbuyer, Home Buyer in San Ramon, CA

Question on the repeat home buyer tax credit...

Asked by sanramonbuyer, San Ramon, CA Sat Oct 31, 2009

Our escrow closing date in Nov. 20th and we are wondering if delaying the closing till Dec. 1st would make us eligible for the $6,500 repeat home buyer tax credit. The tax credit details are not announced yet, so don't know for sure, but would like to know any perspectives. We are trading up (we purchased first house > 5yrs ago) and our new house will be our principal residence. Any comments are welcome. thanks.

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The "repeat home buyer" tax credit is VERY EXCITING! The credit is up to $6500 for repeat home buyers who have owned a home for at least 5 years in the last 8 year period. This purchase can be closed as soon as Nov 6th and is good through April 30th, 2010 (contract date) with a closing on or before June 30th, 2010. The INCOME LIMITS have also been EXPANDED for single filers to $125,000 annual income and $225,000 for joint filers. The maximum sales price is $800,000. Don't forget that "1st time home buyers" (those that have not owned a home in the last 3 years) are eligible for a credit up to $8000!! Both of these tax credits are DOLLAR FOR DOLLAR credits which means you will actually get the entire credit back! For more info please TEXT or TWEET (832)298-7981.
1 vote Thank Flag Link Wed Nov 18, 2009
Hi again! I was just asked another simlar question by a consumer who read this post. The dates can be tricky, so I thought it might be helpful to post the actual verbiage and text of the new law. It was enacted on November 6, 2009.

http://www.govtrack.us/congress/billtext.xpd?bill=h111-3548

Best -

Jeri Creson, Broker
TotalAccess Realty Advisors
(818) 448-1298
jericreson@yahoo.com
1 vote Thank Flag Link Mon Nov 16, 2009
Congratulations! And yes - dates on these tax credits are critical. I have clients who closed in May of this year whose income was too high to take advantage of the credit. They recently contacted me, hoping to get the benefit of the expanded credit, since they purchased in 2009. Unfortunately, the expanded portions are not available retroactively to buyers who closed earlier this year. You, on the other hand, are poised perfectly in the driver's seat to take full advantage of your timing.

Jeri Creson, Broker
TotalAccess Realty Advisors
jericreson@yahoo.com
(818) 448-1298
1 vote Thank Flag Link Thu Nov 12, 2009
For a FAQ on the repeat buyer tax credit, refer to:
http://federalhousingtaxcredit.com/faq2.php

Tell your friends, relatives and associates who are moving up or are repeat buyers

If they meet the qualifying criteria (must have owned and lived in the residence for 5 out of the last 8 years) they must be in contract by April 30, 2010 and close escrow in 60 days or July 1 2010.\

And here's a chart comparing what the tax credits were (for first time home buyer) then, what it is today including the repeat buyer tax credit. This is an excellent reference -- so book mark it
http://www.realtor.org/fedistrk.nsf/files/government_affairs…

Congrats!
Web Reference: http://bit.ly/XW5jA
1 vote Thank Flag Link Wed Nov 11, 2009
Looks like you are one of the lucky ones and now have until April 30, 2010 to close on your home and receive the $6,500 credit! Good luck with the buy/move. If you have any questions read our blog on the legislation that was signed on Nov 6th!!!
1 vote Thank Flag Link Wed Nov 11, 2009
The tax credit was extended and revised to include home owners who have owned and lived in that home for 5 consecutive years . Any questions feel free to email me at valellan@raveisre.com
1 vote Thank Flag Link Wed Nov 11, 2009
Hi "srb", here's a chart breakdown of the new tax credit created by NAR's Government Affairs Division (includes effective dates):

http://docs.Steven-Anthony.com/TaxCreditExt.pdf

Best, Steve
1 vote Thank Flag Link Fri Nov 6, 2009
And here's a copy of the bill the way it was presented and voted on http://finance.senate.gov/sitepages/leg/LEG%202009/103009_Wo…

Go to page 14.

Good to have handy as a reference

Good luck!
1 vote Thank Flag Link Thu Nov 5, 2009
1 vote Thank Flag Link Thu Nov 5, 2009
Just heard that the bill may get signed by Obama tomorrow. I am still unclear about the effective date, it is not mentioned anywhere. We need to make a decision quickly if we should postpone the closing till Dec 1st. Has anyone seen any information about the effective date?
1 vote Thank Flag Link Thu Nov 5, 2009
Keep this link handy, from Bloomberg http://www.bloomberg.com/apps/news?pid=20601103&sid=aPL7…

It seems to be updated every time there's a change in the article

But for now, keep your dialogue open with the seller so that your escrow isnt jeopardized on a possibility that the proposed tax credit for the repeat buyer.

Good luck!
1 vote Thank Flag Link Sat Oct 31, 2009
Thanks everyone for responding. I appreciate it. We will wait and see when the bill is passed and its details before floating the idea with the seller and the lender. The seller earlier had agreed (not in writing though) that they can accommodate a few days adjustments, should it be needed.
1 vote Thank Flag Link Sat Oct 31, 2009
Hi "srb", this is the latest from Friday, per a friend who is the Director of Capital Markets for a Mortgage Bank:

"The expected extension and expansion of the tax credit, probably the last one, is expected to be voted on as soon as today and probably signed in the next few days, at best. The signing may happen in spite of the administration preferring a slightly different version. The latest version, and this has not been voted on by the Senate, would extend the credit to home sales that go under contract by April 30 and close by June 30, 2010. A new, $6,500 tax credit would be available for buyers of owner occupied primary residences who have owned during five of the eight years prior to the purchase. Although the House may have its own version, this extension includes a few items such as the home price limit would be $800,000, and the annual income limit to qualify for the tax credit would be $125,000 if you’re single and $250,000 for couples."

I have to also concur wth Dave's comment. I think it's "best not to count the chickens until all the eggs have hatched." This is especially true when the eggs reside in Washington ;-)

Best, Steve
1 vote Thank Flag Link Sat Oct 31, 2009
sanramonbuyer,

Even before contacting a tax professional, I'd wait for the bill to be passed. If the House of Reps amends the Senate version, the bill will have to go through reconciliation. No one knows what the final bill will look like. They could arguably backdate the small credit for everyone who bought in 2009. Keep you posted.
Web Reference: http://bob2sell.com
1 vote Thank Flag Link Sat Oct 31, 2009
It certainly would help you to receive that tax credit! Have you asked your Realtor for their thoughts yet? If you're willing to delay your close of escrow, I would suggest asking your agent to float that idea past the sellers & their agent AFTER you find out if doing so would adversely affect your loan. $6,500 would be a nice short-term gift, but not at the expense of your long-term new home purchase!

Best of luck!

Rachel Knight
Realtor® & CCAR Director
J. Rockcliff Realtors
California DRE License #01243344
(925) 323-6311 Mobile
Rachel@RachelKnight.net
1 vote Thank Flag Link Sat Oct 31, 2009
It is my understanding that is is the closing date that counts and not the date of the contract! Below I have copied and pasted a snippet from http://www.federalhousingtaxcredit.com/faq2.php#1

The Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010).

Hope this helps!

Jeannine Whitaker
0 votes Thank Flag Link Thu Nov 26, 2009
I believe that's incorrect. The applicable clauses are below:

(b) Special Rule for Long-time Residents of Same Principal Residence- Subsection (c) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

‘(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.’.

The applicable effective date clause is here:

(j) Effective Dates-

(1) IN GENERAL- The amendments made by subsections (b), (c), (d), and (g) shall apply to residences purchased after the date of the enactment of this Act.

As the amendment above regarding long time residents is located in subsection (b) - the effective date would be after November 6th when the bill was enacted - to the best of my understanding by reading this bill. But please don't take my word for it - here's the link to the bill:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-3548

And, when in any doubt, please consult a tax professional before taking any official action in this regard.

Best of luck!

Jeri Creson, Broker
TotalAccess Realty Advisors
(818) 448-1298
jericreson@yahoo.com
0 votes Thank Flag Link Wed Nov 25, 2009
I believe the closing must occur after January 1, 2010 for the repeat home buyer tax credit. The contract may also have to be written after November 6th. Consult with your tax advisor to confirm.
0 votes Thank Flag Link Wed Nov 25, 2009
The IRS website has a wealth of information about the tax credits available to new home purchasers. Go to http://www.irs.gov. However, while most real estate agents and lenders can give you accurate information about the tax credit, it is essential that you consult with your tax professional or CPA to see how the credit applies to your unique situation. A tax professional is the only person truly qualified to give you expert, customized tax advice.
Web Reference: http://www.irs.gov/
0 votes Thank Flag Link Tue Nov 24, 2009
It is my understanding that the $6500 tax credit guidelines say you must have been living in your current residence for five of the last eight years. Contracts must be written after Dec. 1, 2009, and that you must your have your current house under contract by April 30, 2010 and close by June 30,2010. There are also price limits and income limits but they are very high for the Texas area so it sounds like most people will qualify.
0 votes Thank Flag Link Tue Nov 17, 2009
Bob's right about waiting till something actually passes and is signed by the President - until then, no law.
The text of HR 1119, which is the pending bill that has been referred to the Ways & Means committee, is at
http://www.thomas.gov/cgi-bin/query/z?c111:H.R.1119:

Who knows what amendments may be added, and whether the Senate will vote the same bill, and if not what happens in conference committee
0 votes Thank Flag Link Sat Oct 31, 2009
It sounds possible: two suggestions...

-your tax advisor
-your lender

Kim

Disclaimer: I am a licensed real estate broker and property/casualty insurance agent in the State of Ohio, providing information and sharing experiences acquired over 15 years in the industries. I do not profess to be qualified to give advice in any other field, though will share opinions and information obtained during my course of work. It is always highly recommended that consumers seek counsel from a specialist in each area in which there is a question or concern.
0 votes Thank Flag Link Sat Oct 31, 2009
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