Chance Gates' Blog

RISMEDIA, January 28, 2010—The Home Buyer Tax Credit is a great program providing a tremendous stimulus for the real estate industry, but the impact of the tax credit is going to be undermined by the restrictive way that the IRS is interpreting the credit for married couples, according to Joseph Rand, one of the founders of Homebuyertaxcredit.com.

In the guidelines of the Home Buyer Tax Credit, the IRS has inadvertently created a “marriage penalty” by requiring that both spouses must have the same exact ownership history in order to claim the credit, which treats married couples differently from unmarried couples. Joseph Rand and the co-founders of Homebuyertaxcredit.com, Greg Rand and Matt Rand, have launched a campaign urging members of Congress to amend the legislation and eliminate this penalty.

“The Home Buyer Tax Credit is designed to incentivize home purchases this year, and it should have a significant impact,” said Joseph Rand. “But the impact is going to be undermined because thousands of married couples will not be eligible due to a very restrictive reading of the legislation by the IRS. The IRS will only allow married couples to claim the credit if both spouses qualify for the same type of credit in their own right, even if the couple would get a tax credit if they were unmarried. Married couples are tested together, and must both be eligible. This is not the case for unmarried couples, who are tested individually such that if one does not qualify, the other can still get a credit.”

Essentially, the only types of married couples who would be eligible to claim the credit would be married couples in which both spouses are qualifying first-time home buyers, or married couples in which both spouses have owned and lived in the same home for at least five consecutive years out of the last eight.

Greg Rand said that this issue was likely an oversight, and the IRS probably did not intend to exact a marriage penalty that undermines such an important economic recovery program. “Clearly, Congress did not intend to render millions of American married couples ineligible for any type of tax credit, even in cases where both spouses would qualify on their own and in cases where unmarried couples are eligible to claim tax credits,” said Greg Rand. “Marriage is the cornerstone of our society.”

Matt Rand suggested that Congress needs to take immediate action steps to correct this unintentional penalty. “To fix this, either Congress needs to revise the legislation or the IRS has to revise its treatment of married couples to allow for eligibility for a tax credit where both spouses would qualify for a tax credit in their own right if they were single or unmarried partners buying together,” said Matt Rand. “If the IRS is not able to revise its interpretation of the law, Congress should explicitly amend the law to fix the marriage penalty by allowing for equitable treatment of married and unmarried couples.”

The Rands are hoping to draw enough attention to the cause so that Congress will be prompted to act quickly. In addition to the campaign on Homebuyertaxcredit.com, a Facebook cause has also been created to bring awareness to the public and urge them to take action. The Rands encourage any married couples who are being affected by the Home Buyer Tax Credit’s restrictive marriage guidelines to go to www.homebuyertaxcredit.com and submit their story.

Upgrading to a qualifying energy-efficient metal or asphalt roof can cut your cooling bill as well as knock off up to $1,500 from your tax bill.

The roof of your house protects against more than rain. The sun’s rays beat down relentlessly, especially during summer. The intense heat can raise the temperature inside your home. Proper venting and insulation help keep the cool air in and the warm air out. So, too, do energy-efficient roofing materials, which take the brunt of the solar onslaught. Uncle Sam is encouraging homeowners to improve the roofs of their primary residences with a tax credit worth up to $1,500.

During 2009 and 2010, you can claim a credit for 30% of the cost of qualifying asphalt or metal roofing materials. The credit, which should be taken on IRS Form 5695 for the tax year in which the work is completed, can be split between 2009 and 2010 but can’t exceed $1,500 total for both years. You can’t claim more in credits than you owe in taxes.

Metal vs. asphalt roofs

To qualify for the tax credit, you must use either metal or asphalt roofing materials that are designed to reduce heat gain—the amount of heat transferred into a home—and meet the requirements of Energy Star, a federal program that promotes energy-efficient products and practices. Metal roofs must have appropriate pigmented coatings and asphalt roofs must have appropriate cooling granules. Asphalt materials can be either traditional shingles or modified bitumen (rolled asphalt sheets). Energy Star has a list of all of its approved roofing products, but only the metal and asphalt materials may qualify for the tax credit.

It’s a good idea to hang on to manufacturers’ certification statements that attest to the tax credit-worthiness of the roofing materials you purchase. These can usually be found on product packaging or company websites. You don’t need to file these with your tax return, but the IRS could ask for them later. Consult a tax adviser.

Dean Kucharski, a 22-year veteran of the roofing business in Pontiac, Mich., estimates that for a typical 2,200-square-foot home, a mid-range asphalt roof will run about $7,000 to $12,000, including labor. The good news is that it will likely last 20 years or more. For a metal roof, expect to pay twice as much, though it can last for 50 years, he says. If you hire a contractor, get an itemized bill that breaks out the cost of materials since labor doesn’t count toward the tax credit. Materials should account for about half the bill on standard roofing jobs.

How much roof do I have?

You can get a rough estimate of how much roofing material you’ll need by figuring the square footage of the footprint of your home and adding about one-third more to account for roof pitch, overhangs, dormers, gables, and so on. Roofing contractors often quote in terms of “squares.” One square equals 100 square feet. So if a roofer says your house is 20 squares, it means it’s roughly 2,000 square feet—20 times 100.

Once you’re ready to pick a roof type, Kucharski suggests talking to an area building wholesaler or a company that specializes in roofing materials. It’s important to consult with someone who knows what types of materials are appropriate for a given region’s climate. Big-box retailers may not have as wide a selection or knowledgeable staff.

Finding a good roofer entails the same steps as finding any qualified contractor: ask neighbors for recommendations, collect at least three bids, check references, and get everything in writing. Craig Silvertooth, executive director of the Center for Environmental Innovation in Roofing, recommends finding a contractor through the National Roofing Contractors Association, which has about 4,000 members.

Save on cooling bills

You’ll get the most bang for your roof-renovation buck if you live in a hot climate, namely the South and Southwest. Expect to save between 7% and 15% on your cooling costs with energy-efficient roofing materials, says Michelle Van Tijen of the Cool Roofs Rating Council. If you pay $300 a month to cool your home, figure you’ll cut your monthly bill by up to $45.

Ironically, with roofs there is such a thing as being too energy efficient. In winter months, roofing materials with very high heat-deflecting qualities can increase heating bills. However, you’re more than likely to make up the difference on your air-conditioning costs. That’s especially true if you live in an area where you run your air conditioner much of the year.

Think hard before replacing a roof that’s in perfectly good shape. Consider instead a roof coating, a material painted over your existing roof that offers insulation and sun reflection, says Silvertooth. Roof coating costs about 75% less than replacing a roof, though it doesn’t qualify for the tax credit. Another affordable way to save on cooling costs that doesn’t even involve the roof is to add more insulation to your attic. This home-improvement project can even be tackled by weekend warriors, and it qualifies for a federal tax credit.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

Gil Rudawsky has been covering business and consumer issues as a reporter and an editor for 18 years, most recently as a business editor at the Rocky Mountain News. He lives in a house built in the 1930s, and always keeps the homeís character in mind when making upgrade.
 http://www.houselogic.com/articles/tax-c…

Trulia, Inc., a real estate search site, has announced that 22% of homes currently on the market in the United States as of December 1, 2009 have experienced at least one price cut.
Read more: http://rismedia.com/2009-12-10/home-pric…

When we already know for the first time in years nondistressed properties had more sale than the short sales or foreclosed properties.
 http://chancegates.com/2009/12/02/octobe…

As presented in the article http://chancegates.com/2009/11/23/180/
interest rates have hit an all time low. With the tax credit extensions for first time buyer which now includes move up buyers also. http://chancegates.com/2009/12/03/first-…
Should make March and April very active months in the Reno/Sparks real estate market, as everyone tries to beat the April 30 deadline.

If your selling a house here is a helpful real estate blog post so you will not be one of the 22%.  http://chancegates.com/2009/04/27/sellin…

If your buying a house in the Reno/Sparks real estate you can visit these helpful blogs post:
 http://chancegates.com/2009/12/06/home-o…

 http://chancegates.com/2009/11/02/home-l…

 http://chancegates.com/2009/09/16/hud-ho…

 http://chancegates.com/2009/10/19/how-to…

 http://chancegates.com/2009/08/12/city-o…

If looking to purchase real estate in Lyon County here is another helpful real estate blog post:
 http://chancegates.com/2009/08/03/new-ns…

National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
Congress has extended and expanded the homebuyer tax credit.

Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

The goal is to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Consult with your approved FHA lender for availability.

IR-2009-27, March 18, 2009

WASHINGTON — As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

The filing options to consider are:

File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.

File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.

Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.

Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.
The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.
 www.Recovery.gov.