New Real Estate Tax Credit is Passed
Congress has passed a tax credit extension for 2010. This means that first time home buyers who purchase a home by April 30, 2010, can apply for a tax credit of $8,000 for married couples and $4,000 for those filing separately.
There has always been some confusion about tax credits and tax deductions. A tax deduction is an item on your tax return such as interest, medical expenses, auto expense and more, while a tax credit means, if your normal tax return would show $10,000 owing to Uncle Sam, you would be able to take $8,000 directly from your tax bill. For that year you would only have to pay $2,000 to Uncle Sam. It is a direct deduction which is designed to put more money in your pocket so you can go out and spend it, thus helping the economy get back to health. None of this business about paying bills and putting something into savings, no, no, no.
There is also something in it for current homeowners. The home owner must have used the home, sold or being sold as a principal residence consecutively for 5 of the previous 8 years, then they are eligible for a tax credit for marrieds of $6,500 and singles of $3,200. All Buyers who want to get the tax credit must include documentation of the purchase on their tax return.
The income limits for both credits have been raised to $125,000 for single buyers and $225,000 for married couples.
We think that this will be an added boost to the housing market. This may already be the reason why the Dow rose a little over 10,000 yesterday from 9744 a few days ago.
Don Schaller
Broker.Owner
Schaller Family Realtors
Dickson Realty Truckee
dschaller@suddenlink
