I’m working with clients right now who this directly applies to. IF the tax credit is important to you, as a buyer, it’s that much more important to try to get in contract immediately. If there is not an extension, or new funds are not applied to the program, it may be too late already for some to take advantage.
Note: Applications for the California tax credit must be faxed to the FTB after escrow closes. So, with that said, if you enter into contract today & have a 30 day close, the money may be there. (4-15-10 contract date / 30-day close 5-14-10 / projected money depletion: 5-10-10 * 5-20-10)
Read more below…
The $100 million allocated for California’s first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.’s Economics team. California’s Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.
C.A.R.’s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.
Senate Bill 401:
“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
If you would like more info on this, please contact me. Thanks!
This is a fantastic boon to first time homebuyers. Some will be able to double dip! It’s good until the end of the year (or up to the $100m allotment, which analysts say could be no more than 6mos!) and will keep our market moving when the federal tax credit expires April 30.
Good job Governor Schwarzenegger!
image courtesy SacBee
Schwarzenegger signs homebuyer tax credit bill
By JUDY LIN Associated Press Writer
Posted: 03/25/2010 03:35:52 PM PDT
Updated: 03/25/2010 05:20:08 PM PDT
SACRAMENTO, Calif.—Gov. Arnold Schwarzenegger on Thursday signed a bill aimed at selling California’s vacant homes and encouraging new construction by extending a $10,000 state tax credit for first-time homebuyers.
The governor signed a bill the state Legislature passed on a bipartisan vote earlier this week. It provides a state tax credit to first-time homebuyers who buy new or existing homes from May 1 until the end of 2010.
Homebuyers can claim 5 percent of the purchase price against their California taxes, or up to $10,000.
To view the whole story: http://www.mercurynews.com/news/ci_14758523?source=email&nclick_check=1
image courtesy of agewise.tv
There are two ways to boost your personal cash flow — increase your income or reduce your spending. Sounds simple, right? The former can be a challenge but the latter doesn’t have to be.
The headline of the video below — “Cut Your Spending By $500 Per Month” — is somewhat sensational but the advice given during the video is spot-on.
From NBC\’s The Today Show, the 5-minute piece offers a half-dozen ways to reduce your cash outflows each month, including:
How to negotiate a lower credit card interest rate
Why it’s important to go grocery shopping with “a list”
How to “time” certain purchases like tires, linens, and clothing
It also covers saving money on a family pet. It’s often easier to save money than to make money.
This video shows how easy it can be.
A home owner in Gibsonia, Pa., about 15 miles north of Pittsburgh, has sued Bank of America because it sent a contractor to turn off the utilities in her home and secure the property because it erroneously believed she was in default.
In the process, the contractor took home owner Angela Iannelli’s 11-year-old Blue and Gold Macaw, Luke — a loss that she said caused her to worry so much that she had to take prescription medicine for anxiety.
Initially, Bank of America was not helpful in finding the lost parrot, and a bank representative allegedly hung up on Iannelli, telling her that they were “tired of hearing” from her.
Iannelli, who is suing for $50,000 in damages, was ultimately able to drive 80 miles to the contractor’s office and rescue the bird.
This week, Bank of America apologized for the incident.
Source: The Wall Street Journal, James R. Hagerty (03/11/2010)