Quick Reference Guide To the $7500 Tax Credit and FAQs Interesting Talking Points

Click HERE if you are having trouble viewing the card Quick Reference Guide To the $7500 Tax Credit and FAQs; Interesting Talking Points This week has been economically a little slow..... it seems to be the calm before the storm (stay tuned......). Have a great weekend. When we can be of assistance to you, please don't hesitate to contact us at 972-28-3400. Linda Quick Reference to the $7500 Tax Credit. If you would like this in a "customizable" word document, send us an email and we will be glad to send it to you. Great information to let your clients know! Also for a great FAQ, go to http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf Feature H.R. 3221 Housing and Economic Recovery Act of 2008 Amount of Credit Ten Percent of the cost of home, not to exceed $7500. Examples: Ø If a home costs $65,000, the allowable credit would be $6,500. Ø If a home costs $120,000, then the allowable credit would be $7,500. Eligible Property Any single-family residence (including condos) that will be used as a primary residence. Refundable Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year. Individuals should consult a professional tax advisor for exact tax calculations. Examples: Ø If an individual's actual tax liability was $5,000, then after the tax credit is applied the purchaser would receive a total refund of $2,500. The refundable amount is the difference between the $7,500 tax credit and the amount of one's tax liability. Ø If an individual's actual tax refund was $2,000, then after the tax credit is applied the purchaser would receive a total refund of $9,500. Income Limit Individuals whose Form 1040 filing status is single (or head of household) are eligible for the tax credit if their income is no more than $75,000. Individuals who file a joint return may have no more than $150,000 in income. Individuals with incomes between $75,001 and 94,999 (single) or $150,001 and $169,999 (joint returns) are eligible for a partial tax credit. Individuals with incomes greater than $95,000 (single) or $170,000 (joint return) are not eligible for this tax credit. First-time Homebuyer Only Purchaser (and purchaser's spouse) may not have owned a principal residence in three years previous to purchase. Recapture A portion (6.67% of credit) is to be repaid each year for 15 years. If home is sold before 15 years, then remainder of credit is due in the year of the sale. Ø If a homebuyer claims the $7,500 credit in 2009 on their federal income tax return for a closing that occurred in 2008, then the credit is received in 2009, so repayment begins in 2010 with an annual repayment amount of approximately $500 a year. Ø If the homeowner dies, their heirs do not have to pay back the remaining balance. Ø If the house is sold before fifteen years have passed and the home's appreciation is less than the amount needed to be to paid back, the loan is forgiven. Ø If the home is turned into a rental or investment property, the pay back balance is due in that year. Effective Date Purchases on or after April 9, 2008 until July 1, 2009 Talking Points TAX STAT - The top 1% of US taxpayers is responsible for the payment of 40% of all federal income tax. Ten years ago (1998), the top 1% of taxpayers paid 35% of all federal income tax. Twenty years ago (1988), the top 1% of taxpayers paid 28% of all federal income tax (source: Tax Foundation, IRS). A TRILLION MORE - With just 2 months remaining to be reported in fiscal year 2008 (i.e., 10/01/07 to 9/30/08), the US government is projected to spend $2.9 trillion for the 12-month period. During fiscal year 2001 (i.e., the first fiscal year that ended during President Bush's initial term in office), total government spending was $1.9 trillion (source: Treasury Department). NOT TOTALLY HONEST - The US government believes that sole proprietors, on average, report and pay taxes on only 50% of their annual profits, contributing to an overall estimated $345 billion annual "tax gap," i.e., the difference between what all US taxpayers should have paid in federal income taxes vs. what they actually paid (source: IRS, Barron's). FAST IN THE WATER - When the US men's 4 x 100 meter freestyle relay team (which included American swimming superstar Michael Phelps) won the gold medal last Monday morning, they broke the existing world record by 3.99 seconds. Sweden's team also broke the old world record in the race (by 0.31 seconds) and finished 5th in the race, receiving no medal for their efforts (source: NBC Olympics coverage). Have a blessed weekend. Let us know when we can be of assistance. Linda Linda Davidson, Senior Loan Officer, DE Underwriter Service First Mortgage 972-278-3400 office 972-497-6452 fax 1-866-963-3777 Toll Free www.davidsongroup.net Check out our blog: http://lindadavidsonmortgage.blogspot.com The Davidson Mortgage Group Ranking 6th Nationally in FHA/VA Purchase Units Closed! Ranking 33rd Team in the Nation in Total Purchase Units Closed! Ranking #69th Team in the Industry for Total Units! Voted #1 Area Mortgage Team For The Past 10 Years We ARE The Mortgage Experts! Your Lender for Purchase, Refinances, Reverse Mortgages and Commercial Lending!! P.S. The finest compliment that we can receive is a referral from you . We appreciate your trust! Linda The Home Buying Experts! The Davidson Group Service First MortgageLinda DavidsonOffice: 972-278-3400 Email us at:ldavidson@servicefirstmtg.comVisit our website at:http://www.davidsongroup.net