A Complete Guide to the 2010 California Homebuyer Tax Credit

The Facts About The $10,000 California Homebuyer Tax Credits We will begin in a moment Online Class & Discussion Brought to you by Broadview Mortgage Katella Branch 1-866-667-6724

California $10,000 Tax Credit Facts
The Purpose and Goals of this Class
Purpose: To Educate and Empower Home Owners
Goal: Eliminate confusion and misinformation about qualifying for and claiming the CA Tax Credit
Goal: Arm you with a complete understanding of ALL of your Tax Credit Options – Fed & CA
Goal: Leave you more informed about the landscape of today’s real estate market so you can make informed decisions

Topics We Will Cover In This Class
Two Tax Credits in One
A Tale of Two Qualifying Guidelines
Ticking Time lines and Availability of Funds
How Credit is Calculated and Claimed
Double Dip Delight – Fed & State Sweet Spot
Ineligible for Tax Credit if…..
Wrap up and Take Aways
Questions & Answers Period

Questions and Answers
You may type questions in at any time during the presentation – Questions Box on your screen
Home Buying experts are available to answer questions throughout presentation
This is an interactive learning environment. You will get the most value by having your specific questions answered
The only dumb question is the one you don’t ask
Write number down now in case you get disconnected
1-866-667-6724

Two Tax Credits in One
$200,000,000 Available for California Homebuyers
$100,000,000 Available for “New” Home Buyers
Extension of previous tax credit
$100,000,000 Available for “Existing” Home Buyers
Expanded beyond terms of previous tax credit
Different Reservation Guidelines
Different Qualifying Guidelines for Each

A Tale of Two Qualifying Guidelines
NO First Time Homebuyer Requirement if Buying New Construction
First Time Homebuyer Requirement if Buying Existing Home
First Time Homebuyer Definition: Buyer must not have interest in a principle residence within the past 3 years
A First Time Homebuyer that is also purchasing New Construction will receive credit from “New” home allocation – IMPORTANT

Ticking Time Lines & Availability of Funds
Must Purchase (Close Escrow) After May 1 st , 2010 and Before December 31 st , 2010
Or enter into an Enforceable contract executed on or before December 31 st , 2010 and Closes by August 1 st , 2011
Reservations are taken on first-come-first-served basis
Previous Tax Credit funds lasted only 3 months before exhausted

Ticking Time Lines & Availability of Funds
AFTER the $100 Million is reserved – Get on the waiting list
Many tax payers will not use full $10,000 credit
Allocation of Tax Credit is reduced to 70% of available for New Construction
Allocation of Tax Credit is reduced to 57% of available for First Time Homebuyers
Waiting Buyers notified by December 31 st , 2011

How Credit is Calculated
Tax Credit earned is the lesser of 5% of the purchase price or $10,000
$200,000 purchase price for full $10,000 tax credit
Home must be primary residence
Single family attached or detached homes only
Credit paid back if you sell or move before 2 years
Credit is paid in 3 yearly installments of up to $3,333

How Credit is Calculated
Single or Joint Taxpayers due full credit
Married filing separate returns split credit
Tenants in Common credit split based on ownership
Claimed on a timely filed original return for the year purchased
Exception is credit reserved but escrow not closed until after December 31 st , 2010 – Amended OK

How Credit is Claimed
Reservation of tax credit requested by application to the Franchise Tax Board under penalty of perjury
“ New Home” - Builder / Seller must provide a joint certification that home has never been previously occupied
Reservation may be submitted for “New” construction homes in contract but not yet closed
Reservations for First Time Homebuyers CANNOT be made until after close of escrow

Taxpayer submits form certifying First Time Homebuyer status with proof of purchase
Proof of purchase (Settlement Statement) must be submitted within 2 weeks of close of escrow to be awarded credit
Credit is not “Refundable” as is the Federal Tax Credit
You WILL NOT receive a credit, carryover or check for any unused portion of this tax credit

“ The tax credits cannot reduce regular tax below the tentative minimum tax (TMT)”
Consult your Tax Professional about AMT

Double Dip Delight – Fed & State Sweet Spot
It is possible to claim both $8,000 federal tax credit AND CA State credit
Must be First Time Homebuyer or Buy “New” if not
Must enter into enforceable contract by April 30 th , 2010 and close escrow by June 30 th , 2010 for Federal
Must close after May 1 st , 2010 for CA State credit

Ineligible for Tax Credit if…..
You’ve already claimed a CA Tax Credit
Taxpayer is under 18 years old at Purchase
If Taxpayer was claimed as a dependant for any other tax payer for the taxable year of the purchase
If Home is purchased from relative – Non arms length
or if Home is purchase from a spouse’s relative

Wrap Up and Take Aways
Last tax credit ran out in 3 months – New Homes
Get on Waiting List for $7,000 “New Home” Credit
Get on Waiting List for $5,700 “FTHB” Credit
Tax Credit Reservations can be made with executed contract if buying New Construction
Tax Credit DOES NOT mean you will pay NO State Tax – Alternative Minimum Tax may still be owed
Tax credit is NOT automatic – Must submit request within 2 weeks of close of escrow

Wrap Up and Take Aways
We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs
Give us an opportunity to earn your trust if you have not already chosen a lender
We are more than happy to be your “second opinion” if you are already working with someone
We can recommend a qualified Real Estate Agent in your area that shares our values and expertise
We are committed to educating and empowering homeowners - Please join us for other classes

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Thank You email includes a link to “Praise” page
Your feedback is greatly appreciated
For more information
1-866-667-6724
Homeownership Educator
Scott Schang
Branch Manager
Broadview Mortgage Corporation

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A Complete Guide to the 2010 California Homebuyer Tax Credit

by HomeownershipUniversity.com on Apr 03, 2010

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A Complete Guide to the 2010 California Homebuyer Tax Credit — Presentation Transcript