Senate OKs $15,000 tax break for homebuyers – I believe investors too eligible for this tax credit

[SDEngineer]

[quote=PKMAN]Am I eligible as first-time homebuyer?

I sold my home in May of 2004 and have been overseas ever since. Now I’m coming back and will be buying a home with estimated escrow date of mid/late March. This makes me a non-homeowner for nearly 5 years. I wonder if thus I can be considered a first-time buyer?[/quote]

Yes. The test is 3 years of non-home ownership.

However, the amendments added recently remove the “first time buyer” provisions, so it applies to all home purchases.

[Eugene]

[quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.

[Eugene]

[quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.

[Eugene]

[quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.

[Eugene]

[quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.

[Eugene]

[quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.

[SDEngineer]

[quote=ariffe22]nobody should count their chickens before they hatch here, but it appears as the bill is written it applies to purchases after 12/31/08. In addition it appears that you need to put at least 5% down on the home to be eligible for the credit and the home must be a “principal residence”. There are recapture provisions if it does not meet the principal residence test within the first 36 months.
Then again, this has not passed the joint congressional committee and obtained the President’s signature. Congress says they will be done with this by President’s Day 2/16. We will see.
[/quote]

The 5% down rule is in a similar bill proposed by Sen. Thune (R) that also proposed an increase to 15K for this credit that hasn’t yet come to a vote. Thune’s bill is VERY unlikely to be passed, because it covers multiple areas, many of which have already been voted down (such as the GOP tax proposal to drop the 10% and 15% tax brackets down to 5% and 10% respectively), as well as a “poison pill” which forbids future tax increases to pay for any of the current spending (VERY unlikely to make it through a democrat controlled legislature).

The bill that passed todays was simply an amendment to the Inouye bill which bumps the credit to 15K, while keeping the change to make it a true credit. It does NOT contain the minimum downpayment increase to 5% that the Thune bill does.

[SDEngineer]

[quote=ariffe22]nobody should count their chickens before they hatch here, but it appears as the bill is written it applies to purchases after 12/31/08. In addition it appears that you need to put at least 5% down on the home to be eligible for the credit and the home must be a “principal residence”. There are recapture provisions if it does not meet the principal residence test within the first 36 months.
Then again, this has not passed the joint congressional committee and obtained the President’s signature. Congress says they will be done with this by President’s Day 2/16. We will see.
[/quote]

The 5% down rule is in a similar bill proposed by Sen. Thune (R) that also proposed an increase to 15K for this credit that hasn’t yet come to a vote. Thune’s bill is VERY unlikely to be passed, because it covers multiple areas, many of which have already been voted down (such as the GOP tax proposal to drop the 10% and 15% tax brackets down to 5% and 10% respectively), as well as a “poison pill” which forbids future tax increases to pay for any of the current spending (VERY unlikely to make it through a democrat controlled legislature).

The bill that passed todays was simply an amendment to the Inouye bill which bumps the credit to 15K, while keeping the change to make it a true credit. It does NOT contain the minimum downpayment increase to 5% that the Thune bill does.

[SDEngineer]

[quote=ariffe22]nobody should count their chickens before they hatch here, but it appears as the bill is written it applies to purchases after 12/31/08. In addition it appears that you need to put at least 5% down on the home to be eligible for the credit and the home must be a “principal residence”. There are recapture provisions if it does not meet the principal residence test within the first 36 months.
Then again, this has not passed the joint congressional committee and obtained the President’s signature. Congress says they will be done with this by President’s Day 2/16. We will see.
[/quote]

The 5% down rule is in a similar bill proposed by Sen. Thune (R) that also proposed an increase to 15K for this credit that hasn’t yet come to a vote. Thune’s bill is VERY unlikely to be passed, because it covers multiple areas, many of which have already been voted down (such as the GOP tax proposal to drop the 10% and 15% tax brackets down to 5% and 10% respectively), as well as a “poison pill” which forbids future tax increases to pay for any of the current spending (VERY unlikely to make it through a democrat controlled legislature).

The bill that passed todays was simply an amendment to the Inouye bill which bumps the credit to 15K, while keeping the change to make it a true credit. It does NOT contain the minimum downpayment increase to 5% that the Thune bill does.

[SDEngineer]

[quote=ariffe22]nobody should count their chickens before they hatch here, but it appears as the bill is written it applies to purchases after 12/31/08. In addition it appears that you need to put at least 5% down on the home to be eligible for the credit and the home must be a “principal residence”. There are recapture provisions if it does not meet the principal residence test within the first 36 months.
Then again, this has not passed the joint congressional committee and obtained the President’s signature. Congress says they will be done with this by President’s Day 2/16. We will see.
[/quote]

The 5% down rule is in a similar bill proposed by Sen. Thune (R) that also proposed an increase to 15K for this credit that hasn’t yet come to a vote. Thune’s bill is VERY unlikely to be passed, because it covers multiple areas, many of which have already been voted down (such as the GOP tax proposal to drop the 10% and 15% tax brackets down to 5% and 10% respectively), as well as a “poison pill” which forbids future tax increases to pay for any of the current spending (VERY unlikely to make it through a democrat controlled legislature).

The bill that passed todays was simply an amendment to the Inouye bill which bumps the credit to 15K, while keeping the change to make it a true credit. It does NOT contain the minimum downpayment increase to 5% that the Thune bill does.

[SDEngineer]

[quote=ariffe22]nobody should count their chickens before they hatch here, but it appears as the bill is written it applies to purchases after 12/31/08. In addition it appears that you need to put at least 5% down on the home to be eligible for the credit and the home must be a “principal residence”. There are recapture provisions if it does not meet the principal residence test within the first 36 months.
Then again, this has not passed the joint congressional committee and obtained the President’s signature. Congress says they will be done with this by President’s Day 2/16. We will see.
[/quote]

The 5% down rule is in a similar bill proposed by Sen. Thune (R) that also proposed an increase to 15K for this credit that hasn’t yet come to a vote. Thune’s bill is VERY unlikely to be passed, because it covers multiple areas, many of which have already been voted down (such as the GOP tax proposal to drop the 10% and 15% tax brackets down to 5% and 10% respectively), as well as a “poison pill” which forbids future tax increases to pay for any of the current spending (VERY unlikely to make it through a democrat controlled legislature).

The bill that passed todays was simply an amendment to the Inouye bill which bumps the credit to 15K, while keeping the change to make it a true credit. It does NOT contain the minimum downpayment increase to 5% that the Thune bill does.

[SDEngineer]

[quote=esmith][quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.[/quote]

Because the bills all currently modify the existing program. I’ve read the text of the bills as presented, and none present a new program – they just modify the previously existing program. None of the bills that I’ve read (Inouye’s, Isakson’s, and Thune’s) do anything to modify the phase-out provisions in the existing program – they just change the dates, the repayment provision, and in Isakson’s and Thune’s, the amount and the scope (to allow all principal residence purchasers).

Here’s the text of the relevent portion of Inouye’s bill (which Isakson’s modified further, and Thune’s is similar, just adding a 5% downpayment requirement):

SEC. 1006. EXTENSION OF FIRST-TIME HOMEBUYER CREDIT; WAIVER OF REQUIREMENT TO REPAY.

(a) Extension.–

(1) IN GENERAL.–Section 36(h) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(2) CONFORMING AMENDMENT.–Section 36(g) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(b) Waiver of Recapture.–

(1) IN GENERAL.–Paragraph (4) of section 36(f) is amended by adding at the end the following new subparagraph:

“(D) WAIVER OF RECAPTURE FOR PURCHASES IN 2009.–In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008, and before September 1, 2009–

“(i) paragraph (1) shall not apply, and

“(ii) paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer.”.

(2) CONFORMING AMENDMENT.–Subsection (g) of section 36 is amended by striking “subsection (c)” and inserting “subsections (c) and (f)(4)(D)”.

(c) Effective Date.–The amendments made by this section shall apply to residences purchased after December 31, 2008.

[SDEngineer]

[quote=esmith][quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.[/quote]

Because the bills all currently modify the existing program. I’ve read the text of the bills as presented, and none present a new program – they just modify the previously existing program. None of the bills that I’ve read (Inouye’s, Isakson’s, and Thune’s) do anything to modify the phase-out provisions in the existing program – they just change the dates, the repayment provision, and in Isakson’s and Thune’s, the amount and the scope (to allow all principal residence purchasers).

Here’s the text of the relevent portion of Inouye’s bill (which Isakson’s modified further, and Thune’s is similar, just adding a 5% downpayment requirement):

SEC. 1006. EXTENSION OF FIRST-TIME HOMEBUYER CREDIT; WAIVER OF REQUIREMENT TO REPAY.

(a) Extension.–

(1) IN GENERAL.–Section 36(h) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(2) CONFORMING AMENDMENT.–Section 36(g) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(b) Waiver of Recapture.–

(1) IN GENERAL.–Paragraph (4) of section 36(f) is amended by adding at the end the following new subparagraph:

“(D) WAIVER OF RECAPTURE FOR PURCHASES IN 2009.–In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008, and before September 1, 2009–

“(i) paragraph (1) shall not apply, and

“(ii) paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer.”.

(2) CONFORMING AMENDMENT.–Subsection (g) of section 36 is amended by striking “subsection (c)” and inserting “subsections (c) and (f)(4)(D)”.

(c) Effective Date.–The amendments made by this section shall apply to residences purchased after December 31, 2008.

[SDEngineer]

[quote=esmith][quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.[/quote]

Because the bills all currently modify the existing program. I’ve read the text of the bills as presented, and none present a new program – they just modify the previously existing program. None of the bills that I’ve read (Inouye’s, Isakson’s, and Thune’s) do anything to modify the phase-out provisions in the existing program – they just change the dates, the repayment provision, and in Isakson’s and Thune’s, the amount and the scope (to allow all principal residence purchasers).

Here’s the text of the relevent portion of Inouye’s bill (which Isakson’s modified further, and Thune’s is similar, just adding a 5% downpayment requirement):

SEC. 1006. EXTENSION OF FIRST-TIME HOMEBUYER CREDIT; WAIVER OF REQUIREMENT TO REPAY.

(a) Extension.–

(1) IN GENERAL.–Section 36(h) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(2) CONFORMING AMENDMENT.–Section 36(g) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(b) Waiver of Recapture.–

(1) IN GENERAL.–Paragraph (4) of section 36(f) is amended by adding at the end the following new subparagraph:

“(D) WAIVER OF RECAPTURE FOR PURCHASES IN 2009.–In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008, and before September 1, 2009–

“(i) paragraph (1) shall not apply, and

“(ii) paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer.”.

(2) CONFORMING AMENDMENT.–Subsection (g) of section 36 is amended by striking “subsection (c)” and inserting “subsections (c) and (f)(4)(D)”.

(c) Effective Date.–The amendments made by this section shall apply to residences purchased after December 31, 2008.

[SDEngineer]

[quote=esmith][quote=SDEngineer][quote=temeculaguy]What is the income ceiling? The current $7,500 credit phases out at 75k for singles and 150k for couples. If it follows the same formula it will help most of the country but so cal will get the shaft again.[/quote]

Currently, the phase-outs remain the same. To the best of my knowledge, there are no bills proposing to lift those limits as well, so if I were a betting man, I’d bet they would remain as currently written.[/quote]

Why do you think that the phase-outs remain the same? There’s nothing about income ceiling in the text of the amendment.[/quote]

Because the bills all currently modify the existing program. I’ve read the text of the bills as presented, and none present a new program – they just modify the previously existing program. None of the bills that I’ve read (Inouye’s, Isakson’s, and Thune’s) do anything to modify the phase-out provisions in the existing program – they just change the dates, the repayment provision, and in Isakson’s and Thune’s, the amount and the scope (to allow all principal residence purchasers).

Here’s the text of the relevent portion of Inouye’s bill (which Isakson’s modified further, and Thune’s is similar, just adding a 5% downpayment requirement):

SEC. 1006. EXTENSION OF FIRST-TIME HOMEBUYER CREDIT; WAIVER OF REQUIREMENT TO REPAY.

(a) Extension.–

(1) IN GENERAL.–Section 36(h) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(2) CONFORMING AMENDMENT.–Section 36(g) is amended by striking “July 1, 2009” and inserting “September 1, 2009”.

(b) Waiver of Recapture.–

(1) IN GENERAL.–Paragraph (4) of section 36(f) is amended by adding at the end the following new subparagraph:

“(D) WAIVER OF RECAPTURE FOR PURCHASES IN 2009.–In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008, and before September 1, 2009–

“(i) paragraph (1) shall not apply, and

“(ii) paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer.”.

(2) CONFORMING AMENDMENT.–Subsection (g) of section 36 is amended by striking “subsection (c)” and inserting “subsections (c) and (f)(4)(D)”.

(c) Effective Date.–The amendments made by this section shall apply to residences purchased after December 31, 2008.

[Author]

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