Earlier this month, on November 6, the president signed into law HR 3548, the "Worker, Homeownership, and Business Assistance Act of 2009.'' The act did several things: It extended unemployment benefits, extended and liberalized the tax credit for first time homebuyers, and it added a credit for "move-up" buyers.

Many people aren't aware of the provision for move-up buyers. Yesterday, I was speaking to another Realtor (an experienced, successful Realtor), who was surprised to hear about it. I recently got a great summary from my accountant, which is worth passing on. Here are some of the basics:

Homebuyer credit basics. Before the new law was enacted, the homebuyer credit was only available for qualifying first-time home purchases after April 8, 2008, and before December 1, 2009. The top credit for homes bought in 2009 is $8,000 ($4,000 for a married individual filing separately) or 10% of the residence's purchase price, whichever is less. Only the purchase of a main home located in the U.S. qualifies. Vacation homes and rental properties are not eligible. The homebuyer credit reduces one's tax liability on a dollar-for-dollar basis, and if the credit is more than the tax you owe, the difference is paid to you as a tax refund. For homes bought after Dec. 31, 2008, the homebuyer credit is recaptured (i.e., paid back to the IRS) if a person disposes of the home (or stops using it as a principal residence) within 36 months from the date of purchase.

Before the new law, the first-time homebuyer credit phased out for individual taxpayers with modified adjusted gross income (AGI) between $75,000 and $95,000 ($150,000 and $170,000 for joint filers) for the year of purchase.

Your guide to the revised homebuyer credit. The new law makes four important changes to the homebuyer credit:

(1) New lease on life for the homebuyer credit. The homebuyer credit is extended to apply to a principal residence bought before May 1, 2010. The homebuyer credit also applies to a principal residence bought before July 1, 2010 by a person who enters into a written binding contract before May 1, 2010, to close on the purchase of the principal residence before July 1, 2010. In general, a home is considered bought for credit purposes when the closing takes place. So the extra two-months (May and June of 2010) helps buyers who find a home they like but can't close on it before May 1, 2010. They can go to contract on the home before May 1, 2010, close on it before July 1, 2010, and get the homebuyer credit (if they otherwise qualify). Note that certain service members on qualified official extended duty service outside of the U.S. get an extra year to buy a qualifying home and get the credit; they also can avoid the recapture rules under certain circumstances.

(2) The homebuyer credit may be claimed by existing homeowners who are "long-time residents." For purchases after November 6, 2009, you can claim the homebuyer credit if you (and, if married, your spouse) maintained the same principal residence for any 5-consecutive year period during the 8-years ending on the date that you buy the subsequent principal residence. For example, if you and your spouse are empty nesters who have lived in your suburban home for the past ten years, you are potentially eligible for the credit if you "move down" and buy a smaller townhome. There's no requirement for your current home to be sold in order to qualify for a homebuyer credit on the replacement principal residence. Thus, the replacement residence can be bought to beat the new deadlines (explained above) before the old home is sold. For that matter, you can hold on to your prior principal residence in the hope of achieving a better selling price later on.

The maximum allowable homebuyer credit for qualifying existing homeowners is $6,500 ($3,250 for a married individual filing separately), or 10% of the purchase price of the subsequent principal residence, whichever is less.

(3) The homebuyer credit is available to higher income taxpayers. For purchases after November 6, 2009, the homebuyer credit phases out over much higher modified AGI levels, making the credit available to a much bigger pool of buyers. For individuals, the phaseout range is between $125,000 and $145,000, and for those filing a joint return, it's between $225,000 and $245,000.

(4) There's a new home-price limit for the homebuyer credit. For purchases after Nov. 6, 2009, the homebuyer credit cannot be claimed for a home if its purchase price exceeds $800,000. It's important to note that there is no phaseout mechanism. A purchase price that exceeds the $800,000 threshold by even a single dollar will cause the loss of the entire credit.

The new purchase price limitation applies whether you are buying a first-time principal residence or are a qualifying existing homeowner purchasing a replacement principal residence.

Other homebuyer credit changes. The new law includes a number of new anti-abuse rules to prevent taxpayers from claiming the homebuyer credit even though they don't qualify for it. The most important of these are as follows:

... Beginning with the 2010 tax return, the homebuyer credit can't be claimed unless the taxpayer attaches to the return a properly executed copy of the settlement statement used to complete the purchase of the qualifying residence.

... For purchases after Nov. 6, 2009, the homebuyer credit can't be claimed unless the taxpayer has attained 18 years of age as of the date of purchase (a married person is treated as meeting the age requirement if he or his spouse meets the age requirement).

... For purchases after Nov. 6, 2009, the homebuyer credit can't be claimed by a taxpayer if he can be claimed as a dependent by another taxpayer for the tax year of purchase. It also can't be claimed for a home bought from a person related to the buyer or the spouse of the buyer, if married.

... Beginning with 2009 returns, the new law makes it easier for the IRS to go after questionable homebuyer credit claims without initiating a full-scale audit.

What hasn't changed. The tax law still gives you the extraordinary opportunity to get your hands on homebuyer credit cash without waiting to file your tax return for the year in which you buy the qualifying principal residence. Thus, if you buy a qualifying principal residence in 2009 you can treat the purchase as having taken place this past December 31, file an amended return for 2008 claiming the credit for that year, and get your homebuyer credit cash relatively quickly via a tax refund. Similarly, you can treat a qualifying principal residence bought in 2010 (before the new deadlines) as having taken place on December 31, 2009, and file an original or amended return for 2009 claiming the credit for that year.

What also hasn't changed is the need for getting expert tax advice in negotiating through the twists and turns of the new beefed-up homebuyer credit. Please call us today at 562-961-1415 or email info@showmehome.com for details on how the homebuyer credit can help you or your family members.

Please stop by and see me this Sunday at 799 Orizaba Avenue in Long Beach. I'll be holding an open house at this classic Spanish style home across the street from Rose Park and refreshments will be served! Listed at $449,000, the home offers 2 bedrooms plus a parlor, with a total of 1400 square feet. This is a rare opportunity to own a home across the street from this historic neighborhood's namesake park.

If you'd like to take a virtual tour in the meantime, visit our website at http://www.ShowMeHome.com or call 562-961-1415.

It's official. The tax credit for first-time homebuyers was extended today. President Obama signed leglislation that extends the $8,000 tax credit to contracts that are signed by April 30, 2010 and closed by June 30th. The credit was set to expire after November 30th.   Additionally, the bill creates a $6,500 credit for those who buy a home after living in their current house at least five years. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The credit will be available only for the purchase of principal residences priced at $800,000 or less.

The bill will raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

The IRS reported that through mid-September, 1.4 million tax returns had qualified for the credit. Some portion of those returns represents buyers who took advantage of an earlier version of the tax credit, which was only worth $7,500 and has to be repaid over time.  The National Association of Realtors estimates that 1.8 million homebuyers will have used the credit by the end of November -- at least 355,000 of whom would not have bought a home without the tax break.

Locally, I've seen a number of buyers drawn into the market due to the homebuyer credit combined with low interest rates and prices. The low inventory is still making it challenging for home buyers to get offers accepted, but for those who persevere, there are some good deals.

As the deadline for the $8,000 tax credit for qualifying first-time homebuyers gets closer, it looks like lawmakers may extend it until next year. A measure is being seriously discussed on Capitol Hill.

In our local real estate market, the credit has definitely breathed life into a struggling housing market. While most people wouldn't buy a home solely because they'd get a credit, that combined with low interest rates and low prices has drawn lots of buyers off the fence and into the market.

The tax credit extension has received support from both Republicans and Democrats but the measure still has not come to a vote.

By Melissa Pamer, Staff Writer
Article Launched: 10/23/2008 10:08:23 PM PDT

Despite a lingering dispute over a planned Carson-area high school, Los Angeles school representatives and local elected officials donned hard hats and grins Thursday to break ground on the campus.

The Carson High School drill team and marching band performed, as did first-graders from neighboring Dominguez Elementary School, while construction workers operated heavy machinery at the nearby building site.

Full Story Here

Long Beach Homes for Sale

By ALEX VEIGA
AP Business Writer
October 26, 2008

Heavy discounting on foreclosed homes and low interest rates continued to power a homebuying spree across the West in September, sending sales of existing homes in the region soaring at an annual pace reminiscent of the days of the housing boom, according to two reports Friday.

About 100,000 existing homes and condos were sold last month in the 13-state region. Without adjusting for seasonal factors, sales were up nearly 43 percent from the same month last year, but declined 9.6 percent versus August's total, according to the National Association of Realtors.

With sharply discounted foreclosures making up a larger slice of overall sales, the median price in the West plunged almost 19 percent from a year ago to $253,600 - slightly higher than what the median was five years ago, the association said.

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Long Beach Homes

DailyBreeze.com
By Melissa Pamer, Staff Writer
October 26, 2008

Among the dozens of red-tile rooftops that now dot Rancho Palos Verdes' Long Point, workers are beginning to put the finishing touches on a massive seaside resort that has finally taken shape in recent months.

After more than a decade of planning, Terranea Resort is readying for its June debut, when all elements of the upscale pleasure dome are set to open simultaneously - including a 360-room hotel, 33 meeting rooms, 20 bungalows, 82 casitas and villas, a nine-hole golf course, three restaurants and a spa.

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Homes in Long Beach

Press-Telegram
10/26/08

The California Foreclosure Institute is holding a free, two-hour workshop for investors and Realtors on how to get started finding and buying foreclosure properties on Tuesday.

The workshop from 6:30 to 8:30 p.m. is at Long Beach Main Library, 101 Pacific Ave. Reservations required. To register, go to www.ForeclosureWorkshop.net or call 310-379-0101

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Orange County Realtor

Los Angeles Times
By Michael A. Hiltzik
October 27, 2008

In a harbinger of what may be a flood of similar disclosures, City National Bank in Beverly Hills said Sunday that it would receive a $395-million capital infusion from the U.S. Treasury as part of the government's $250-billion bailout program.

The bank said it had no "explicit or implicit understanding" with federal regulators about how it would use the money -- whether to increase lending in the community or acquire a specific bank.

But Russell Goldsmith, chief executive of the bank's parent company, City National Corp., said the investment "clearly enhances our financial capacity to make acquisitions and . . . to lend to a larger degree."

With $12.2 billion in deposits, City National is the largest bank based in Los Angeles County and second-largest independent bank in California.

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Long Beach Real Estate

Adorable Spanish style home
6165 Brayton Ave, Long Beach
(Thomas Guide #: 765F1)

Listing Status: Active Offered At: $265,000 (Show Monthly Payments) 2 Bedrooms, 1 Baths Detached Single Family Home. 867 Sq. Ft. one story 4680 Sq. Ft. Lot Built in 1931 Association Dues: 0 2 Car Garage.

Property Features Tile Floors Arched Doorway To Formal Dining Coved Ceilings Ceiling Fan Original Built In Cabinet In Dining Room Faux Firelplace Custom Paiting Fenced Front Yard Covered Patio Bonus Room In Garage Long Driveway Lush Landscaping

Property Details Adorable Spanish style home features tiled floors, coved ceilings, custom paint, and lots of charm! Large living room plus quaint formal dining room with built-in corner cabinet. Newer kitchen has lots of storage and cabinet space. Fenced front yard with lush landscaping plus a nice back yard with covered patio. 2 car garage currently used as bonus room with separate laundry room but a long driveway provides plenty of parking. Don't miss this Lovely home! For More Information Contact: The Shannon Jones Team Web Site: www.shannon4re.com E-Mail: info@showmehome.com (562) 961-1415 (562) 896-2456 Cell: (562) 896-2456 Keller Williams Coastal Prop. For more information on this property, or to make arrangements to view this property, Click Here!