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Archive for the ‘Tax Credit’ Category

Atlanta’s Real Estate Closings in 2012

Friday, December 28th, 2012

What paperwork do you need if you bought or sold in 2012?  Many residential sales are non-taxable events (principal residence or no gain), but sellers will have a 1099 and must still file the appropriate income tax forms.

Buyers: 

1.  HUD-1 Settlement Statement – this is needed for income tax preparation. Pay attention to closing costs, prepaid interest, property tax prorations, and other fees that may be deductible.

2.     Recorded Warranty Deed (or other deeds such as Limited Warranty Deed, Special Warranty Deed, Quit Claim Deed, Executor’s Deed, or Trustee’s Deed)  – these are needed to claim homestead exemption. You must provide recording deed book and page number from the recorded deed.

Sellers:

1.     HUD-1 Settlement Statement – this is needed for income tax preparation to show the sales price and all costs of the sale (closing costs, commissions, property taxes, etc.);

2.     1099 form – usually provided at closing by closing attorney – this form shows the gross sales price plus any prorated taxes that are being credited to the seller from the buyer (in case the seller tries to deduct the entire year’s property taxes).  The 1099 forms are no longer mailed out; there is an electronic report sent by each closing attorney directly to the IRS.

Again, please note that many, but not all, residential sales are non-taxable events (principal residence or no gain);  the seller will have a 1099 and must still file the appropriate income tax forms! Remember, as your Atlanta Realtor, I will always keep you informed!

 

Foreclosures in Atlanta

Wednesday, April 20th, 2011

There’s a new bill in Congress, The Housing Recovery Act of 2011, or H.R. 1526, which is aiming at getting the backlog of foreclosures sold, by allowing buyers to use retirement funds for purchases.

The new bill aims to clear the growing foreclosured properties’ backlog by allowing buyers to dip without penalty. The bill would amend the IRS tax code, so that qualified individuals could use distributions as a down payment to purchase residences that have been in foreclosure status for one year or more.

Typically, pulling funds out of an IRA, 401k, or similar retirement accounts prematurely would call for early distribution penalties, but Florida Congressman (and real estate agent) Bill Posey is hoping the IRS will waive it for the greater good. US Rep. Posey introduced the bill in the US House last week, and it was referred to the Committee on Ways and Means.

If it is passed, it will come with a few requirements:

  1. The subject property must have been in foreclosure for one or more years;
  2. The retirement funds must be used within 120 days of the close of purchase;
  3. The foreclosed property must be held be the buyer for a minimum of two years to avoid any early distribution penalties. It will not allow investors to “flip” properties.

The bill is aimed at promoting sustainable homeownership, while giving homeowners a tax break. Let’s hope the Congress can move on this!

Atlanta Real Estate: The New Tax Break

Tuesday, August 3rd, 2010

On April 30, 2010, mortgage rates were 5.125%.  April 30 was the last day to write a contract and be eligible for the $8000 first time homebuyer tax credit offered by the IRS. Today, mortgage rates are 4.375%.

For Atlanta homebuyers who purchased after the tax credit expired, the difference in these rates, for a $300,000 loan, would be a savings of $135/month!  Over a 5-year period, today’s homebuyer would save $8,100 in interest payments, versus the homebuyer who received the tax credit, but closed on a higher interest rate.  

In effect, the market/banks are providing an amazing stimulus to the economy!

Will the Tax Credit Extension Help Atlanta Home Buyers?

Saturday, July 3rd, 2010

Eligible buyers now have until September 30 to close on a home sale, to be eligible for the much heralded tax credit.  On July 2, President Obama signed a bill to extend the $8,000 Home Buyers Tax Credit. To be eligible for this extension, buyers needed to be under contract as of April 30, 2010.

The National Association of Realtors estimated that there were approximately 180,000 home buyer families who were unable to get their new-home purchases closed by the previously-extended deadline of June 30. It has been difficult for these buyers to get their mortgages approved on time, as lenders could not work through the clogged pipeline of applications.

It’s a shame that congress won’t give working families the credit indefinitely.

Atlanta GA Real Estate Tip: Filing a Real Property Tax Return in 2010

Wednesday, February 10th, 2010

Are your Atlanta-area property taxes too high? Read this to learn how to file and appeal your tax assessment!

Many properties have dropped in value since last year, but this does not mean that the property taxes will automatically go down. If you want to lower your assessment, you must file a Real Property Tax Return early in 2010 to lower your assessment from 2009 and to have the right to appeal your 2010 assessment.

This tax return is not the same as an appeal, and the value submitted by the owner does not set the final assessed value.  However, the tax assessor will review the owner’s value and decide whether to accept it or dispute it. The property owner will then have the right to appeal an official assessment that exceeds the owner’s proposed value.   This is a separate process.

The procedures and deadlines vary by county (usually March 1 or April 1, with no extensions).  Most counties require the form to be mailed – no fax or email. PLEASE NOTE:   This is in addition to filing for your Georgia homestead exemption.

See these websites for forms and details:

Cobb County:     http://www.cobbassessor.org/Forms/HtmlFrame.aspx?mode=Content/TPRRP.htm

DeKalb County:   http://web.co.dekalb.ga.us/TaxAssessor/events.asp

Fulton County:    http://www.fultonassessor.org/Forms/HtmlFrame.aspx?mode=content/taxpayer.htm&LMparent=180

Gwinnett County: http://www.gwinnettcounty.com/cgi-bin/gwincty/egov/ep/gcbrowse.do?channelId=-61080&pageTypeId=536880236

 A special thanks to Leigh Clack, Neel & Robinson Attorneys at Law, for pulling this fantastic information together!

Extending the Tax Credit

Wednesday, November 4th, 2009

I am  happy to report that we are two steps closer to extending the $8000 tax credit!  A lopsided 85-2 Senate vote last night was followed by another lopsided 97-1 vote today.  The final Senate vote is expected sometime after 6 PM EST tomorrow, Thursday, November 5.  The hope is that it goes immediately to the House and then to the President for his signature. 

I will continue to keep this post current but the swift movement and lopsided Senate votes are a testimony as to what the home-buying public wants! If you are interested in buying, selling or investing in Atlanta real estate, please call or email us today and Experience True Experience!