IRS's top 10 tax tips for home sellers
I saw this article in Inman News and though it might be helpful. Please check with your account or tax preparer for tax advice.
Real Estate Tax Talk
By Stephen Fishman, Monday, August 15, 2011.
From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful.
Last week the agency released "Ten Tax Tips for Individuals Selling Their Home," (IRS Summertime Tax Tip 2011-15).
As a real estate agent or broker, it is not your job to give home sellers tax advice. Indeed, it is advisable not to, since you could end up getting sued if you give wrong advice.
Instead, refer sellers to this list of IRS tips. It's a good starting place for them to begin to understand this often complex area of tax law. You could even print it out and hand it to anyone who asks you about these issues.
Here are the IRS's top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.
Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.
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Steve Melnick
Realty World Colorado Homes
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Littleton, Co 80120
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http://www.makinghomeaffordable.gov/pages/default.aspx HAMP Modificaiton web site
BofA Donates Then Demolishes Houses to Cut Glut of Foreclosures
BofA Donates Then Demolishes Houses to Cut Glut of Foreclosures
Q
By Lindsey Rupp - Jul 27, 2011 8:43 AM MT
I have been telling our clients here in Colorado that in other parts of the country were the job market is worse and block after block of homes are vacant that the cities and banks will start demolishing the homes to handle the excess supply of homes on the market. Protect your equity before values drop further and make the move Now!
http://bloom.bg/qS3qy8#ooid=RsdHhvMjpzCgQXiXW3Qmq7Xsp4TuN0hl
Bank of America Corp. (BAC), faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer.
The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Fannie Mae are conducting or considering their own programs.
Disposing of repossessed homes is one of the biggest headaches for lenders in the U.S., where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. of Irvine, California. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping.
“There is way too much supply,” said Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., which works with lenders, government officials and homeowners to salvage vacant homes. “The best thing we can do to stabilize the market is to get the garbage off.”
BofA’s 40,000
Bank of America had 40,000 foreclosures in the first quarter, saddling the Charlotte, North Carolina-based lender with taxes and maintenance costs. The bank announced the Cleveland program last month, has committed as many as 100 properties in Detroit and 150 in Chicago, and may add as many as nine cities by the end of the year, said Rick Simon, a company spokesman.
The lender will pay as much as $7,500 for demolition or $3,500 in areas eligible to receive funds through the federal Neighborhood Stabilization Program. Uses for the land include development, open space and urban farming, according to the statement. Simon declined to say how many foreclosed properties Bank of America holds.
Ohio ranked among the top 10 states with the most foreclosure filings in June, according to RealtyTrac. The state has 71,617 foreclosed homes, Cuyahoga County 9,797 and Cleveland 6,778, RealtyTrac said.
The tear-downs are in varying states of disrepair, from uninhabitable to badly damaged. Simon said some are worth less than $10,000, and it would cost too much to make them livable.
Unwanted Homes
“No one needs these homes, no one is going to buy them,” said Christopher Thornberg, founding partner at the Los Angeles office of Beacon Economics LLC, a forecasting firm. “Bank of America is not going to be able to cover its losses, so it might as well give them away and get a little write-off and some nice public relations.”
Donating a house may create an income-tax deduction, said Robert Willens, an independent accounting analyst based in New York. A bank might deduct as much as the fair market value if a home wasn’t acquired with the explicit intent of knocking it down, he said.
Wells Fargo and Fannie Mae already started donating houses and demolition funds in Ohio. San Francisco-based Wells Fargo, the biggest U.S. home lender, gave 26 properties and $127,000 to the Cuyahoga land bank, said Russ Cross, Midwest regional servicing director for Wells Fargo Home Mortgage. Since 2009, Wells Fargo made more than 800 donations, the bank said.
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Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
View Bill Mathisen's Listings
ASD (Accredited Short Sale Designation)
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Second Housing Shock...Bank Can't find Legal Documents...
This Story viewed on 60 Minutes on April 3rd. 2011. 60 Minutes is always very informative and I think it’s important to keep informed on what’s happening in housing.
Looking to buy or sell ? Curious if it is really the best time Click here for a FREE Report
Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
View Bill Mathisen's Listings
ASD (Accredited Short Sale Designation)
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Real Estate is about Families
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Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
ASD (Accredited Short Sale Designation)
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
6 STEPS TO IMPROVE YOUR CREDIT RATING
Here are some tips from a book review from Tara Nicholle Nelson from Inman News on How to improve your credit rating. If you would like to purchase the book its self here is the information: "Your Credit Score: Your Money & What's at Stake"
Author: Liz Pulliam Weston
Publisher: FT Press, 2009; 224 pages; $22.69
It's no secret that credit scores are increasingly important. The recession has sent many a consumer's score down the drain, as people have lost homes, settled debts, declared bankruptcy, short-sold homes and even simply fallen behind on their mortgage payments in an effort to get their lender to restructure their home loan.
While consumer credit card debt is down, so are credit scores, on average, according to a recent study.
At the same time, the end of the subprime era has meant tighter credit requirements not just for home loans, but for all sorts of loans and credit. That's right: Credit is more important than ever, and scores are down.
Until now, most financially savvy folk have been hunkering down, getting bills paid off and attempting to stabilize their position vis-à-vis their homes, with much less concern about their credit score than about the long-term financial soundness of the decisions they are making. As we get things paid, though, many of us will shift our view to credit repair or optimization.
To that end, MSN Money's Liz Pulliam Weston has just released an updated edition of her bestselling manual, "Your Credit Score, Your Money & What's at Stake." Given that credit score algorithms and the rules and regulations that form the landscape underlying a consumer's ability to impact their score change fairly frequently, this is one of the many recent updated editions of personal finance books that is not only timely and welcome, it's truly necessary
As such, I'm taking a detour from my usual rule of reviewing only very recently released books to review this 2009 publication, because I think it's exactly what so many of you, my readers, want and need right now.
Pulliam Weston starts out briefing readers on what it costs to have crappy credit, which might have been a mystery on the first publishing of this book in 2007, but was crystal clear by the time this version was published a little over a year ago.
She sketches out the differential interest costs to two hypothetical women (one with "good" credit, the other with a low credit score) considering their credit cards, auto loans and mortgages and tallies them up to a lifelong "penalty" of more than $300,000 to the woman with poor credit.
Next, Pulliam Weston provides readers with a primer on how credit scores work, an oft-covered, yet still-more-often misunderstood subject. She impresses upon readers that the score is an ever-changing snapshot that is used to predict all sorts of credit-related behavior; the ever-changing nature of the score is both a blessing (you can improve it!) and a burden (you must stay vigilant about it!), in Pulliam Weston's world.
She drills down into the five most important elements of your score, and shows readers how to find the scores that matter to lenders.
In addition to covering the traditional FICO score, Pulliam Weston also covers the alternative FICO Expansion score, which is used to assess the creditworthiness of consumers who have little or no traditional credit, and the relatively new VantageScore (which is published by the credit bureaus themselves, rather than by Fair, Isaac & Co., the FICO score publisher).
In what I'd call the "money" chapter of the book, Pulliam Weston presents a basic, but comprehensive and detailed, six-step program for improving your credit score, including credit score-maximizing approaches to actually eliminating debt and managing your use of credit cards on a monthly basis.
If you simply want to improve your credit, without any of the fluff, fast-forward to this chapter, but not through it. I'd encourage those looking to buy or refinance a home anytime in the next couple of years to start working this plan, stat.
Next, Pulliam Weston busts a bunch of credit score myths, most of which are no longer commonly held (in my opinion), but a few of which are -- a good chapter to quickly peruse to make sure you're not holding any false credit beliefs.
The next two chapters are worth their weight in post-recession gold. Pulliam Weston offers a very logical, useful process for working your way through a credit crisis, empowering readers to calmly reason themselves through very scary times by prioritizing their bills, the consequences of not paying them, and the action steps they need to take in very tough times, like when the money runs out.
And, for the aftermath, Pulliam Weston offers a chapter on credit score rehabilitation, post-crisis. If you're not planning to buy or refi, but have just survived financial you-know-where and high water, this one's for you. You'll learn about your rights, which debts not to touch with a 10-foot pole, which ones to play ball with and how to get your score in rebuild phase.
Pulliam Weston also offers fast fixes for those who need a quick little boost before making a large credit purchase (think: home); covers identity theft (which is more common than you might think) and how to unwind its credit score impact; and talks you through the impact of your credit score on your insurability and insurance rates, before providing some long-term guidelines for maintaining healthy credit over time.
Whether you're buying a home, refinancing or simply trying to build your credit back after a job loss or other financial trauma, "Your Credit Score" presents a concise, comprehensive, extremely user-friendly guide to get your score where you want -- and increasingly, will need -- it to be. I strongly recommend this book
Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
ASD (Accredited Short Sale Designation)
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Where are Buyers Buying Now!
Trulia buyer report gives insight to which states and markets are seeing increased and decreased activity on their web site.
Check out this CNBC/Trulia Video
http://www.truliablog.com/2010/09/01/new-cnbc-trulia-home-traffic-report/
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Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
ASD (Accredited Short Sale Designation)
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Private Sector Loan Modification Triple In July
The Banks and Loan Servicing companies are speeding up their efforts on Loan Modifications as the Foreclosures rise. We expect to see new efforts like banks allowing owner to rent back their homes after the house has been foreclosed on to keep houses from going vacant. If you know someone who needs information on modifying their loan or help with an Short Sale to Avoid Foreclosure. Please give up a call at 303-996-2501 or e-mail me at steve.melnick@realtyworldcoloradohomes.com. Yesterday I received a call from a current client who lost her job after 20 years. I told her to call her lender and ask about the HAUP (Home Affordable Unemployment Program) which would allow her to defer her loan payments for several months while she searches for a job. This is a newer program released by the Government as part of the HAMP (Home Affordable Modification Program) to help homeowners keep their homes. I checked with Bank of American yesterday and they told me to expect to wait 20 business days to receive a loan modification package to fill out for the various programs. This was due to the number of homeowners applying for loan modification; so don’t get discouraged. The squeaky wheel gets the grease! Call every day or every other day if you have to in order to insure a quicker response. I hope the information we provide or forward on to our listeners and clients is helping to do our part in solving the foreclosure problem.
Private mortgage modifications more than triple HAMP in July
· by Jon Prior
· 11:49 AM September 1, 2010
· Private-Sector Mortgage Modifications Outnumber HAMP More than 2 to 1
· Hope Now: Private sector modifications up 10% in June
· Private Sector Mortgage Modifications Outnumber HAMP 2 to 1
· Bank of America permanent HAMP modifications up 5.9% in July
There were 120,351 permanent mortgage modifications done through proprietary programs in July, more than triple the 36,695 completed through the Home Affordable Modification Program (HAMP) in the same month.
Servicers completed 1.13 million modifications through both private programs and HAMP so far in 2010, according to Hope Now, a private sector alliance of those servicers, investors, mortgage insurers and nonprofit counselors.
The amount of private modifications nearly matched the 120,811 reported in June. Originally, Hope Now reported 123,000 private modifications in June but has since adjusted the number with updated figures from the Mortgage Bankers Association (MBA). A spokesperson for Hope Now said its numbers are extrapolations and are subject to change when the size of the market as reported by the MBA changes.
According to Hope Now, if a homeowner does not qualify for HAMP, he or she is considered for eligibility in the proprietary programs.
Since Hope Now began reporting the data, more than 3.5 million homeowners have received a permanent loan modification either through the private programs or HAMP. When combined with repayment plans and forbearance, the mortgage industry has given 10.4 million homeowners assistance since Hope Now was formed in 2007.
Foreclosures starts did almost double the modifications in July. Hope Now reported 226,664 foreclosure starts for the month, a 22% increase from June. Foreclosure sales reached 97,951 in July as well, a 12% growth from the previous month.
Hope Now did report that the amount of borrowers entering 60-plus day delinquency fell 5% in July and 20% from the beginning of the year to 3.2 million borrowers.
But Lender Processing Services (LPS) reported last week that 900,000 loans that were current at the beginning of the year are now either 60-plus days delinquent or in foreclosure.
“Foreclosure starts increased to the fourth highest level on record with rebounds in the portfolio and private markets compounding the recent acceleration in agency foreclosure starts leading to a significant jump in rates,” LPS said at the time.
Faith Schwartz, senior adviser for Hope Now, said that while the industry continues to make progress and there are some positive trends, foreclosure starts and sales are increasing.
“We believe this is a function of borrowers moving through the pipeline of all eligible program offerings (government and private industry) to exhaust all alternatives,” Schwartz said. “The increase in foreclosures is also a reflection of the continued challenges facing the economy, particularly the level of unemployment nationwide. We remain hopeful that as jobs start to come back the housing market will stabilize
Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Home Buyer Tax Credit Renewed? | Radical 'Save Housing' Programs Expected
The Obama administration plans to set up an emergency loan program for the unemployed and a government mortgage refinancing effort in the next few weeks to help homeowners after home sales dropped in July, Housing and Urban Development Secretary Shaun Donovan said.
“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN’s “State of the Union” program yesterday. “That’s why we are taking additional steps to move forward.”
The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, Donovan said.
“We’re going to continue to make sure folks have access to home ownership,” he said.
Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since the data began in 1963.
Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery.
House Sales Plummet
Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed last week. Demand for single-family houses dropped to a 15-year low and the number of homes on the market swelled.
U.S. home prices fell 1.6 percent in the second quarter from a year earlier as record foreclosures added to the inventory of properties for sale. The annual drop followed a 3.2 percent decline in the first quarter, the Federal Housing Finance Agency said last week in a report.
Donovan said on CNN yesterday that it is too soon to say whether the administration’s $8,000 first-time homebuyer credit tax credit, which expired April 30, will be revived.
“All I can tell you is that we are watching very carefully,” Donovan said. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”
Reviving the tax credit would “help enormously” in the effort to fight foreclosures and revive the economy, Florida Governor Charlie Crist said on the same CNN program. Florida has the third-highest home foreclosure rate in the country, with one in every 171 housing units receiving a foreclosure filing this year.
Steve Melnick
Realty World Colorado Homes
4 W. Dry Creek Cir Suite 260
Littleton, Co 80120
303-996-2501 Office
303-478-4125 Cell
steve.melnick@realtyworldcoloradohomes.com
www.realtyworldcoloradohomes.com
Home Affordable Foreclosure Alternative (Video) http://www.youtube.com/user/MakingHomeAffordable#p/u/0/XbPaLHFHL7A
Motivational Quote of the Day
Begin forwarded message:
From: "Nightingale-Conant" <ncreply2@nightingale.lyris.net>
Date: August 20, 2010 6:25:00 AM MDT
To: Steve melnick <stevenlmelnick@gmail.com>
Subject: Motivational Quote of the Day
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