Tax credit extension for those trying to meet 6/30 deadline!

tabbaldwinJune 17, 2010

My realtor just forwarded the news to me. We're building, and our contract has been in place for months, but we weren't sure we'd beat the June 30 deadline for closing (or in our case, a Cert. of Occupancy). Whew.......

Senate approves home tax credit extension

By ANDREW TAYLOR (AP) Â 18 hours ago

WASHINGTON Â The Senate on Wednesday approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

The move by Senate Majority Leader Harry Reid would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal, approved by a 60-37 vote, would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.

Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation's highest foreclosure rate, and Reid is facing a tough re-election campaign.

The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

"If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts," the Realtors said a a letter to lawmakers.

First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

The $140 million cost of the measure would be financed by denying businesses the ability to deduct from their taxes punitive damages paid when losing lawsuits or judgments.

Copyright © 2010 The Associated Press. All rights reserved.

http://www.google.com/hostednews/ap/article/ALeqM5gyeaY6RTkGpP0yC5IUaTXUXLpe6AD9GCIFFO0

Here is a link that might be useful: Senate approves home tax credit extension

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creek_side

The article is misleading in that it doesn't point out all the hurdles that are still in the way of the extension. For one thing, the bill it is attached to must pass both houses and be reconciled.

Passage of the basic bill is still uncertain in the Senate. Even if it does pass the Senate, the extension may not survive the reconciliation process.

Also, at least one news source is headlining the story as "US Home Tax Credit Deadline Extended," which is pure nonsense. That hasn't happened yet, and is in no way guaranteed to happen.

Considering that the measure is financed by banning businesses from writing off punitive damage awards on their taxes, it is sure to be fought tooth and nail by the Chamber of Commerce crowd.

Given the way the blogosphere rapidly spreads rumors as fact, it wouldn't surprise me if a lot of buyers started counting on this happening, perhaps to get a rude surprise at tax time.

Be cautious out there, and don't count your chickens......

    Bookmark   June 18, 2010 at 8:45AM
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pamghatten

Thank you creekside ... I'm in the mortgage business and we have been watching this closely .. the rumors are flying and that's dangerous at this point.

    Bookmark   June 18, 2010 at 1:01PM
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tabbaldwin

President Approves Extension Of Closing Deadline For Home Tax Credit
by JACOB GAFFNEY

Homebuyers will have an extra three months to qualify for the tax credit on transactions already under contract, with passage of an extension that also covers deals that just missed the June 30 deadline. In addition to first-time buyers, homeowners with at least five years in their current home are eligible for the credit on purchase of a new residence. See the following article from HousingWire for more on this.

President Barack Obama this morning signed HR 5623, the "Homebuyers Assistance and Improvement Act of 2010," a three-month extension on the closing deadline for first-time home buyers to receive the tax credit.

Potential homeowners with offers currently under contract now have until September 30 to close the deal, instead of the original June 30 deadline.

The tax credit remains at a maximum $8,000.

The Senate approved the bill late Wednesday evening, a day after it passed the House of Representatives.

A copy of the HR 5623 can be downloaded here.

The bill is worded to retroactively include properties that closed in the last two days.

According to the Internal Revenue Service , besides providing a tax benefit to first-time homebuyers and purchasers who havenÂt owned homes in recent years, the law also allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence.

To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.

    Bookmark   July 5, 2010 at 7:09PM
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