First Time Home Buyer Tax Credit Extension: More Fuel for the Charleston, SC Market

31. August 2009 · Write a comment · Categories: General Tax · Tags: , , , , , , , , ,

We’ve had great news in the housing market this past week!  The ,000 First Time Home Buyer Tax Credit will be extended through April 30, 2010.  This extension is good news especially for first time home buyers taking advantage of the credit.

 

But, even if you don’t qualify for it, know that you should benefit indirectly from it.  It’s been a very effective incentive for getting homes sold in Charleston, and as Realtors we’ve seen the results firsthand in our area.  The extension is expected to help continue the healthy growth that we’ve seen in the Charleston real estate market in the past few months.

 

I have included below more of the details regarding the tax credit extension.  These are important to note because this go round, there are more provisions to meet compared to the original tax credit.

 

1)  The IRS defines a first-time home buyer as someone who has not owned a principal residence for the three years prior to purchase.

 

2)  The amount is equal to 10 percent of the home’s purchase price, up to a maximum of ,000.

 

3)  The purchase price of the home must be 0,000 or less.

 

4)  The time frame includes sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, if a binding sales contract is signed by April 30, 2010, a buyer can still qualify if he/she closes by June 30, 2010.  Buyers who are in the military have some special extensions for these deadlines, so be sure to tell your lender if you meet this qualification.

 

5)  For homes purchased on or after January 1, 2009 and on or before November 6, 2009:  single tax payers must meet the income limit of ,000 (for married couples filing jointly, their income must not exceed 0,000).

6)  For homes purchased after November 6, 2009 and on or before April 30, 2010:  single tax payers must not exceed the income limit of 5,000 (married couples filing jointly must not exceed 5,000).

7)  The main benefit of a tax credit is that it works as a dollar-for-dollar benefit.  If it were a tax deduction, it would only reduce your tax liability and would only save you ,000 to ,500 in the long run. So, let’s say you are a first time home buyer qualifying for the entire credit.  If you owe ,000 in income taxes qualify for a tax credit of ,000, you would owe nothing.

8)  The tax credit is also refundable, which means you can receive a check for the credit if you have little or no income tax liability. So, let’s say you are eligible for a tax credit of ,000, and you owe ,000 in income taxes.  You can still receive a check for the remaining ,000!

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Low Income Housing Tax Credit Market Studies and Appraisal

31. August 2009 · Write a comment · Categories: General Tax · Tags: , , , , ,

Low Income Housing Tax Credit (LIHTC or Housing Tax Credit) program has been made a permanent element of chapter 42 of the Federal Income Tax Code. Owners of Low Income Housing Tax Credit Properties receive tax credits for a portion of the construction/renovation cost. Tax credits can be used to directly reduced federal income taxes. (Tax deductions reduce taxable income and thereby indirectly reduce income taxes.)

Provisions of the Low Income Housing Tax Credit program require a market study be prepared as part of the application process administered by the state. (Each state in the U.S. receives a defined proportion of tax credits. A state department administers the program in each state. There are typically applications for at least three times the volume of tax credits available. Credits are allocated by the state department.)

Low Income Housing Tax Credit market study requirements vary from state to state. In addition, they tend to change from year to year. Over the past 15 years, the market study required for Low Income Housing Tax Credit properties has become much more detailed.

A Low Income Housing Tax Credit market study covers all issues in a typical market study. In addition, since some of all the units are allocated to households earning up to 50% or 60% of the median household income, additional review is necessary to determine the depth of market for this segment of the population.

Low Income Housing Tax Credit appraisals vary from typical appraisals in several ways. They consider the effect of the land use restriction agreement (LURA) and they include multiple market values (as completed, as stabilized, and as though not subject to the LURA).

O’Connor & Associates is a national leader in preparing Low Income Housing Tax Credit market studies and appraisals. During the past 15 years we have prepared over 1,000 market studies or appraisals for the Low Income Housing Tax Credit program.

The appraisal division of O’Connor & Associates is a national provider of commercial real estate appraisal services including insurance valuation, real estate appraisals, cost segregation studies, due diligence, feasibility studies, financial modeling, gift tax valuations, highest and best use analyses, casualty loss valuations and HUD map market studies.

Home Buyer Tax Credit: Not Just for Home Buying Virgins Anymore

30. August 2009 · Write a comment · Categories: General Tax · Tags: , , , , , ,

The First Time Home Buyers tax credit law was just recently extended through May 1, 2010.  The part of the new law that has been under-reported is that the new law extends tax credit to those who are veterans of home buying.

The first time home buyer tax credits basically remain the same as the one that was supposed to have expired November 30, 2009.  It provides first time home buyers with an eight thousand dollar tax credit on the purchase of a qualifying home.  The rules for repeat buyers are a little different-so read on to get the details.

Here is a quick review of the pertinent points of the Home Buyer Tax Credit for the first time home buyer:

Up to 10% tax credit on the purchase price of a new home-maxing out at ,000.00 Must not have owned a home for at least the three years before the qualifying purchase. If a couple, both individuals must meet above criteria. They must live in the new home for three years as their principal residence. You cannot purchase the home from a parent, grandparent or your children. If your tax credit is above your tax liability, you may receive a refund check for the balance. (If you qualify for 8,000 dollar credit and your tax bill is 4,000, you may receive a refund in cash for the balance. Home purchase price is capped at 0,000.

The pertinent points for repeat home buyers:

Must have been living in one residence for five of the last eight years. The tax credit is up to 10% of the purchase price, but is capped at ,500 for repeat buyers. Married couples modified income limit begins to phase out at 5,000 and is capped at 5,000. No retroactivity- Must purchase between November 6, 2009 and close before July 1, 2010 with a contract in hand before May 1, 2010.

To qualify for both first and repeat buyers credits you must provide proof of purchase-usually a HUD-1 form with your tax return. Your new home does not have to be a detached single family home, but you do have to live there as your principal dwelling-and proof of occupancy may be required if you get audited.

So for those of you who thought the gravy train of a large tax credit was over, this gives you new life to find that qualifying new home-go forth and do your part for the real estate community and buy a new home-but only buy what you can afford.  That tax credit will be of no benefit to you in a year or two if you are struggling to make your payment.  The F-word (foreclosure) is no fun, and that new home can become a burden instead of your new castle.

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Income Tax Rebate Tips: Some Beneficial Tips!!

30. August 2009 · Write a comment · Categories: General Tax · Tags: , , , ,

Do you know what income tax means and how much income tax you are paying? There are lots of things that one must be aware of. The tax which is charged on the incomes of person or corporations is known as income tax. A person must be aware how much income tax is charged on his income. He can save some amount of his tax money by using some useful tips. There are individual income tax and corporate income tax. This is the duty of every person to fill income tax return on time. This is crime not to fill income tax on time and they have to face lot of penalties.

People file income tax on the basis of income made per year. A person should have incoming annual income in order to fill income tax return. Government of a country gets to know annual earning of their citizens one whole year by the way of income tax. People must be aware of the total income tax applicable on their incomes, as they are going to pay hard earned money to the government.

There are some useful tips that will help you to save some tax. The important tip is to fill the income tax return on time. On April 15 every year the income tax return is filled. So be sure that you are saving some amount of money for the income tax return to be filled on time. A specific deadline is issued by IRS (Internal Revenue Service), you can save your money from any charges or penalties, if you are filling the tax on the mentioned date.

The income tax paid by the citizens of the country to the government is used for the public services. Thus, it’s getting utilized for the welfare of the country. This becomes priority of every citizen to pay income tax on time. This will decrease their tension and save them from after effects. Charitable donations and other tax free investments will also help to save the tax. These investments from which you are not gaining anything will help you in saving tax.

There are numbers of income tax consultants available who will help you with all the formalities that can be done in order to save your tax. You can take help of these consultants and can reduce your tension to a large extent.

 

Textile enterprises worse down the export tax rebate

29. August 2009 · Write a comment · Categories: General Tax · Tags: , , , , ,

Confirmation from the relevant authority of the department, involving light industry, textile, metallurgy, steel, machinery and other industries will soon export tax rebate policy adjustment. State Administration of Taxation Management Division of the import and export taxes are recognized, the State Development and Reform Commission, Ministry of Finance and other departments do is look into the matter, but not currently receiving any of the State Council issued a formal document.

    Textile tax rebates “cried bitter”

    ”Shut down 2%, 1%, we can not afford.” For the recent export tax rebate will be reduced 2% of the news, Guangzhou, a large textile enterprise leaders said Mr. Chung was very anxious.

    According to sources, the export tax rebate rate adjustment will involve light industry, textile, metallurgy, steel, machinery and other industries, is expected to export tax rebate rate will be lowered by two percentage points. In addition, various industries have different rate adjustment, were mixed. For example, the textile industry, different products will have different tariff adjustment, the current state is seeking the views of all parties.

    ”On this issue, Development and Reform Commission, Ministry of Finance and other government departments do is study.” State Administration of Taxation Export Tax Management Department spokesman told reporters that the export tax rebate policy adjustment, the relevant departments will certainly seek trade associations view, companies can also reflect the views of the Association.

    However, China Textile Import and Export Chamber of Commerce has said Cao Xinyu, vice president of, has not yet received an official document of the higher authorities. “According to the export tax rebate policy adjustment last practice before the departments concerned to hear industry views on the organization, will convene to seek such advice, but Chamber of Commerce, this practice has not started.”

    Guangzhou, a large textile business executives described the Chung interview yesterday, down 2 percent export tax rebates for textile industry is “worse.” He told reporters that the textile industry’s gross margin is now about 3% to 4%, but excluding various charges, net income is less than 1%. “If the government lowered the export tax rebate go further down, we can hardly maintain its.”

    Will eliminate a number of textile enterprises

    Reporter learned that many textile enterprises in Guangzhou for export tax rebate adjustment policy choice at this time wondering: “RMB has appreciated by almost 3%, textile industry has been very difficult, why further downwards?”

    Well-known experts in the textile industry, the World Fan Min, president of the Victoria Group, estimated that “government may be to cut the export tax rebate rate by the textile industry to promote industrial upgrading and structural adjustment.”

    Fan Min, said growth this year, labor costs, raw materials price index rose a stronger yuan, high oil prices, the cost of operation and quotas, etc., so that exports of textile enterprises profit margins drastically reduced. “At present, China’s textile industry must enter a restructuring, industrial upgrading of the times, the excess capacity to digest the situation, out of some businesses.” In his view, the State hopes to adjust export tax rebate is to promote the healthy development of the industry.

    According to public information, the evolution of China’s export tax rebate rate several times: in 1999 to get rid of the negative impact of the Asian financial crisis, the state will average export rebate from 6% to 15%; October 13, 2003, the State Council issued the Current resolution of the export tax rebate mechanism to cut export tax rebate rate of 3 percentage points.

    In response, Chung said, “2003 national implementation of the new export tax rebate mechanism to cut export tax rebate rate of 3 percentage points, tax rebates for textile products from the original 17% to 13% now.”

    On export tax rebates

    National or regional export tax rebates on exports of goods have been customs departure, pre-export production and circulation in the joints already paid VAT or consumption tax and other domestic indirect taxes, returned to the exporters a tax system. The main profit of some foreign companies and even the Government’s annual rebate from the tax. This is also a means of government to encourage exports by making exports to non-tax prices in the international market to avoid double taxation on cross-border movement of goods, thereby enhancing competitiveness.

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