Real Estate Market

Homeownership provides you with more than a roof over your head and a place to call home. If you plan ahead, your home can be one of the best investments you'll ever make. Additionally, you can also take advantage of many tax breaks available when you buy, sell or improve your home and then file your annual tax returns. New and updated tax legislation was passed or went into effect in 2009 that can decrease your tax bill. Be sure to review the summarized tax information in our Special Edition tax issue to become familiar with benefits that you may qualify for.

If you already own a home, we hope this tax issue of our newsletter will remind you about home-related deductions you are entitled to. Perhaps you'll also learn about some opportunities you were not aware of so you can make sound financial decisions in the future.

If you are thinking of buying a home, this tax issue will summarize the various home-related tax benefits you can enjoy as a home owner. With historically low interest rates, now may make the most sense for you to buy a home and take advantage of the tax benefits when you file your income tax next year.

No matter what your financial situation or home ownership status, be sure to consult with a knowledgeable tax/financial professional and the Internal Revenue Service about your specific tax questions. Information outlined in this newsletter was accurate at press time, but be aware that tax rules and laws are subject to change.

Dan is always looking to the future of real estate and how he can assist his clients with their real estate needs even in the market we are currently in. Dan has continued his education in order to assist homeowners who are facing difficult issues and decisions when it comes to their home.

The Certified Distressed Property Expert Designation (CDPE) is an indication that Dan has taken the initiative to become an educated and prepared advocate on the behalf of a homeowner in distress.

 
For home buyers, deductible expenses include settlement charges for points. Deductible points are upfront charges for the use of money (not services). One point equals 1% of the loan amount. Points paid by either the buyer or seller are deductible by the buyer in the year of the purchase. Although some closing service fees are quoted as “points,” they are not deductible.

HINT: Consider having sellers pay for as many points as possible to increase your tax deduction.  

Qualified first-time buyers can take a tax credit for a principal residence purchased from April 9, 2008 through April 30, 2010. First-time buyers are defined as those who have not owned a principal residence during the three years prior to the purchase closing/settlement date.One of two credits is available, with rules varying depending on purchase date:

1. Homes purchased April 9, 2008 through December 31, 2008: Credit up to 10% of purchase price but no more than $7,500 (or $3,750 for each if married filing separately). Repayment required over 15 years in equal installments (or in full when the home is sold or ceases to be used as a principal residence and there is sufficient gain). First payment due two years after credit is claimed.
   
   A full credit is available to qualified married-joint filers (or equivalent filing status) with Modified Adjusted Gross Income (MAGI) up to $150,000, and to single filers and married filing separately with MAGI up to $75,000. The credit is phased out and disappears completely for MAGIs more than $170,000 (joint filers and equivalent) or $95,000 (others).
   
   
2. Homes purchased January 1, 2009 through April 30, 2010: Credit up to 10% of purchase price but no more than $8,000 (or $4,000 for each if married filing separately). No repayment required providing the home continues to be your principal residence for at least 36 months.
   
   
   1. Homes purchased after January 1, 2009 and closed/settled on or before November 6, 2009 are subject to the same income limits as in 1. above.
      
      
   2. Homes purchased after November 6, 2009 with a binding purchase contract no later than April 30, 2010 and closing/settlement by June 30, 2010 are subject to the following new rules:
      
      
      • The purchase price of the home must not exceed $800,000.
        
        
      • Income limitations are higher than for earlier credits: $225,000 MAGI for married-joint filers (or equivalent), phased out up to $245,000; $125,000 MAGI for single filers and married filing separately, phased out up to $145,000.
        
        
      • Purchasers must attach documentation of their purchase to their tax return.
        
        
      • Qualified members of the U.S. armed forces, military intelligence, or foreign service on overseas deployment for 90 days or more in 2008 or 2009 have until April 30, 2011 to purchase a principal residence and claim the tax credit.

HINT: Contact your tax professional to learn about the fine points of these short-term credits or go online to www.FederalHousingTaxCredit.com.

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For the uninformed, blogging is hitting the Internet today and making a real impact!

What is a blog? An easy explanation of this is a WEB LOG or a journal on the web. It’s a place where folks can “voice” their thoughts, share ideas, or comment on those of others.

The Moorhead and Fargo area now has such a blog where new items of interest will be posted and comments can be made. Topics range from those related to real estate and community highlights to local events of interest or anything personal or business related that might be perceived as worthwhile information for public knowledge, discussion and/or use.

It’s even possible to subscribe to a blog of interest and receive text updates on your iPod! Check out the latest updates for the Moorhead and Fargo Real Estate Blog:

http://www.danwhitman.com/Blog

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