Closing soon! Need clarification on $15,000 tax credit! (loan, home sales)

deefromlv · 02-09-2009, 03:01 AM

I know this was discussed a few days ago here but I really need current information. There are just so many sites talking about this but I was hoping one of our resident scholars on the forums could answer some questions and post a reputable current source I can look at.

Here's our situation. We are set to close very soon. This week. But we can probably push it back to next week. I've researched the current Senate version of the home buyers tax credit and have a few questions.

1. Is it a true credit? For example, I read on one source that it would be a true tax credit not a no interest loan. So if we owed $3000 this year in taxes and $2,000 next year in taxes that would be forgiven but we would get no money back for a 2 year period and just lose whatever of the $15k didn't get used to abate the taxes? Or do we apply like we would have for the $7500 and get the full $15000?

2. Does this need to be repaid?

3. Does it go into effect the day it is signed and you must close on or after that day to qualify?

4. Are there income limits.

Thanks for anyone that can reply with good information and sources. My eyeballs are popping out of my head with all the googling I've done on the subject. We just want have the best possible start in our new home. And it would be awesome if we could get an extra $7500 by just waiting a few days to close.

Thanks,
D

tony soprano · 02-09-2009, 04:39 AM

I think the reason you're having such a difficult time finding a definitive answer is because the final language of the tax credit has not been disclosed. There's a very good likelihood that it hasn't even been fully decided yet. There are key differences in the House and Senate versions of the bill. They both still need to vote again on the final legislation. You can make some general inferences on what the credit will ultimately look like, and how it will be implemented, but that's about it.

jjameson922 · 02-09-2009, 08:08 AM

Somehow I was put on the Obama town hall email list and I get mailings weekly with updates on health care issues with requests for my feedback and other legislation that includes others input and asking for mine. On the economic stimulus for housing, the most recent thing it said has been proposed was, a $7500 rebate for first time home buyer or those who have not owned for 3 yrs and purchase in 2009. For others, the proposal was a 10% rebate up to the price of $150K, thus the $15,000 figure, and the amount would be rebated once you filed your taxes the following year and furnished the appropriate paperwork. I have not had an Obama team email for a week now.

jfkIII · 02-09-2009, 10:09 AM

I also had read that the current thinking is a credit in the amount of 30% of the purchase price or $15K, whichever is less.

Either way, I wouldn't schedule your closing around this piece of legislation. If it's going to fly, it most likely will be valid for all home bought in 2009.

airics · 02-09-2009, 10:20 AM

its 10%

Daddys///M3 · 02-09-2009, 10:30 AM

Quote:

Originally Posted by tony soprano

I think the reason you're having such a difficult time finding a definitive answer is because the final language of the tax credit has not been disclosed. There's a very good likelihood that it hasn't even been fully decided yet. There are key differences in the House and Senate versions of the bill. They both still need to vote again on the final legislation. You can make some general inferences on what the credit will ultimately look like, and how it will be implemented, but that's about it.

Bingo. No guarantee that the stimulus will even pass (although it is likely), let alone with this piece of legislation attached. The latest I have heard is that it is a credit against tax, so unlike the current tax credit where you get a $7500 check, plus tax surplus or minus tax liability, this would only count against your tax liability. Again though, this is rumor and the grapevine has a nasty habit of being wrong. Gonna have to wait and see what the final legislation reads, and it's possible that we won't know that until next week.

airics · 02-09-2009, 10:38 AM

what were the dates for the $7500 check? (all of 2008?)

jfkIII · 02-09-2009, 11:41 AM

4/8/08 through 7/1/09...and the existing $7500 is actually a loan, which must be paid back.

see article for reference to IRS publication...
http://www.sfgate.com/cgi-bin/articl...RET315D3OM.DTL

jfkIII · 02-09-2009, 11:45 AM

Who qualifies
To be eligible, buyers cannot have owned a home for the past three years, and the new home has to be used as a primary residence. The credit phases out as income rises above $75,000 for singles and $150,000 for couples, and disappears entirely at $95,000 and $170,000, respectively.

Applying for it is easy, or at least as easy as doing your income taxes. Just claim it on your return. That's it. No other forms or papers have to be filed.

Both the Senate and the House versions of the new act remove the requirement that buyers repay the credit. The Senate bill applies retroactively to any purchase completed between January 1, 2009 and the end of August. The House version is also retroactive to the start of the year, and expires at the end of June. As long as buyers don't sell for at least 36 months, they keep the money.

And the credit is refundable, meaning that it can be claimed even if the amount of the credit earned exceeds the buyer's tax liability. So even if your total tax bill comes to just $5,000, you can still qualify for a full $7,500 refund.

The housing industry has been pushing this idea for many months, arguing that first-time homebuyers are the key to boosting home sales. First time buyers who purchase from existing homeowners free those sellers to trade up to bigger, better houses.

source: Home buying bonus in the stimulus bill - Jan. 29, 2009

deefromlv · 02-12-2009, 12:57 PM

Thanks all!We went ahead and closed on the house. Can't wait to get in there. We are sooooo excited!D