Wednesday, March 31, 2010

$18,000 in Combined Homebuyer Tax Credits For a Limited Time

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).

California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

source: California Association of REALTORS®

Tuesday, March 16, 2010

Manhattan Beach May Consider Plumbing Retrofits at the Point-of-Sale

In the Daily Breeze today:

Retrofits to buildings

Manhattan Beach. The City Council tonight will discuss possible changes to the Municipal Code concerning sustainable building practices. The measures were suggested by the city's Environmental Task Force. The South Bay Association of Realtors has concerns about a proposal that would require plumbing retrofits upon the sale or transfer of property. The meeting is at 6:30 p.m. at 1400 Highland Ave.

Monday, March 1, 2010

Flood Insurance Update

Senate efforts to extend the National Flood Insurance Program (NFIP), set to expire on February 28, 2010, will continue the week of March 1. Majority Leader Harry Reid (D-NV) tried to expedite but was forced to file a procedural motion to allow a vote as early as Tuesday.

The bill (H.R. 4691) would extend the NFIP until March 28, and includes extensions of employment and COBRA (continuing health) insurance. When the bill reaches the floor, it is expected to pass by a wide margin. NAR will continue to urge the Senate to act and stress the importance of the flood program, without which many consumers would not be able to obtain a mortgage in federally designated flood zones across the U.S.

IRS to Step Up Audits of Independent Contractor Status

NAR reported this week that the IRS has announced it will expand its audits of small businesses during 2010. The purpose of the audits is to assess compliance with the payroll tax requirements that fall on employers and employees and also self-employment payroll tax rules that fall on independent contractors.

The IRS is assessing compliance; it is not targeting any particular industry. These expanded audits provide a useful reminder to broker/owners to assure that they have current documents setting out the required information. Occasionally broker/owners who have been lax in their record keeping with respect to these written agreements have incurred significant penalties.