A Complete Guide to the 2010 California Homebuyer Tax Credit

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A Complete Guide to the 2010 California Homebuyer Tax Credit

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A Complete Guide to the 2010 California Homebuyer Tax Credit

  1. 1. 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
  2. 2. California $10,000 Tax Credit Facts <ul><li>The Purpose and Goals of this Class </li></ul><ul><li>Purpose: To Educate and Empower Home Owners </li></ul><ul><li>Goal: Eliminate confusion and misinformation about qualifying for and claiming the CA Tax Credit </li></ul><ul><li>Goal: Arm you with a complete understanding of ALL of your Tax Credit Options – Fed & CA </li></ul><ul><li>Goal: Leave you more informed about the landscape of today’s real estate market so you can make informed decisions </li></ul>
  3. 3. California $10,000 Tax Credit Facts <ul><li>Topics We Will Cover In This Class </li></ul><ul><li>Two Tax Credits in One </li></ul><ul><li>A Tale of Two Qualifying Guidelines </li></ul><ul><li>Ticking Time lines and Availability of Funds </li></ul><ul><li>How Credit is Calculated and Claimed </li></ul><ul><li>Double Dip Delight – Fed & State Sweet Spot </li></ul><ul><li>Ineligible for Tax Credit if….. </li></ul><ul><li>Wrap up and Take Aways </li></ul><ul><li>Questions & Answers Period </li></ul>
  4. 4. California $10,000 Tax Credit Facts <ul><li>Questions and Answers </li></ul><ul><li>You may type questions in at any time during the presentation – Questions Box on your screen </li></ul><ul><li>Home Buying experts are available to answer questions throughout presentation </li></ul><ul><li>This is an interactive learning environment. You will get the most value by having your specific questions answered </li></ul><ul><li>The only dumb question is the one you don’t ask </li></ul><ul><li>Write number down now in case you get disconnected </li></ul><ul><ul><li>1-866-667-6724 </li></ul></ul>
  5. 5. California $10,000 Tax Credit Facts <ul><li>Two Tax Credits in One </li></ul><ul><li>$200,000,000 Available for California Homebuyers </li></ul><ul><li>$100,000,000 Available for “New” Home Buyers </li></ul><ul><ul><li>Extension of previous tax credit </li></ul></ul><ul><li>$100,000,000 Available for “Existing” Home Buyers </li></ul><ul><ul><li>Expanded beyond terms of previous tax credit </li></ul></ul><ul><li>Different Reservation Guidelines </li></ul><ul><li>Different Qualifying Guidelines for Each </li></ul>
  6. 6. California $10,000 Tax Credit Facts <ul><li>A Tale of Two Qualifying Guidelines </li></ul><ul><li>NO First Time Homebuyer Requirement if Buying New Construction </li></ul><ul><li>First Time Homebuyer Requirement if Buying Existing Home </li></ul><ul><li>First Time Homebuyer Definition: Buyer must not have interest in a principle residence within the past 3 years </li></ul><ul><li>A First Time Homebuyer that is also purchasing New Construction will receive credit from “New” home allocation – IMPORTANT </li></ul>
  7. 7. California $10,000 Tax Credit Facts <ul><li>Ticking Time Lines & Availability of Funds </li></ul><ul><li>Must Purchase (Close Escrow) After May 1 st , 2010 and Before December 31 st , 2010 </li></ul><ul><li>Or enter into an Enforceable contract executed on or before December 31 st , 2010 and Closes by August 1 st , 2011 </li></ul><ul><li>Reservations are taken on first-come-first-served basis </li></ul><ul><li>Previous Tax Credit funds lasted only 3 months before exhausted </li></ul>
  8. 8. California $10,000 Tax Credit Facts <ul><li>Ticking Time Lines & Availability of Funds </li></ul><ul><li>AFTER the $100 Million is reserved – Get on the waiting list </li></ul><ul><li>Many tax payers will not use full $10,000 credit </li></ul><ul><li>Allocation of Tax Credit is reduced to 70% of available for New Construction </li></ul><ul><li>Allocation of Tax Credit is reduced to 57% of available for First Time Homebuyers </li></ul><ul><li>Waiting Buyers notified by December 31 st , 2011 </li></ul>
  9. 9. California $10,000 Tax Credit Facts <ul><li>How Credit is Calculated </li></ul><ul><li>Tax Credit earned is the lesser of 5% of the purchase price or $10,000 </li></ul><ul><li>$200,000 purchase price for full $10,000 tax credit </li></ul><ul><li>Home must be primary residence </li></ul><ul><li>Single family attached or detached homes only </li></ul><ul><li>Credit paid back if you sell or move before 2 years </li></ul><ul><li>Credit is paid in 3 yearly installments of up to $3,333 </li></ul>
  10. 10. California $10,000 Tax Credit Facts <ul><li>How Credit is Calculated </li></ul><ul><li>Single or Joint Taxpayers due full credit </li></ul><ul><li>Married filing separate returns split credit </li></ul><ul><li>Tenants in Common credit split based on ownership </li></ul><ul><li>Claimed on a timely filed original return for the year purchased </li></ul><ul><li>Exception is credit reserved but escrow not closed until after December 31 st , 2010 – Amended OK </li></ul>
  11. 11. California $10,000 Tax Credit Facts <ul><li>How Credit is Claimed </li></ul><ul><li>Reservation of tax credit requested by application to the Franchise Tax Board under penalty of perjury </li></ul><ul><li>“ New Home” - Builder / Seller must provide a joint certification that home has never been previously occupied </li></ul><ul><li>Reservation may be submitted for “New” construction homes in contract but not yet closed </li></ul><ul><li>Reservations for First Time Homebuyers CANNOT be made until after close of escrow </li></ul>
  12. 12. California $10,000 Tax Credit Facts <ul><li>How Credit is Claimed </li></ul><ul><li>Taxpayer submits form certifying First Time Homebuyer status with proof of purchase </li></ul><ul><li>Proof of purchase (Settlement Statement) must be submitted within 2 weeks of close of escrow to be awarded credit </li></ul><ul><li>Credit is not “Refundable” as is the Federal Tax Credit </li></ul><ul><li>You WILL NOT receive a credit, carryover or check for any unused portion of this tax credit </li></ul>
  13. 13. California $10,000 Tax Credit Facts <ul><li>How Credit is Claimed </li></ul><ul><li>“ The tax credits cannot reduce regular tax below the tentative minimum tax (TMT)” </li></ul><ul><li>Consult your Tax Professional about AMT </li></ul>
  14. 14. California $10,000 Tax Credit Facts <ul><li>Double Dip Delight – Fed & State Sweet Spot </li></ul><ul><li>It is possible to claim both $8,000 federal tax credit AND CA State credit </li></ul><ul><li>Must be First Time Homebuyer or Buy “New” if not </li></ul><ul><li>Must enter into enforceable contract by April 30 th , 2010 and close escrow by June 30 th , 2010 for Federal </li></ul><ul><li>Must close after May 1 st , 2010 for CA State credit </li></ul>
  15. 15. California $10,000 Tax Credit Facts <ul><li>Ineligible for Tax Credit if….. </li></ul><ul><li>You’ve already claimed a CA Tax Credit </li></ul><ul><li>Taxpayer is under 18 years old at Purchase </li></ul><ul><li>If Taxpayer was claimed as a dependant for any other tax payer for the taxable year of the purchase </li></ul><ul><li>If Home is purchased from relative – Non arms length </li></ul><ul><li>or if Home is purchase from a spouse’s relative </li></ul>
  16. 16. California $10,000 Tax Credit Facts <ul><li>Wrap Up and Take Aways </li></ul><ul><li>Last tax credit ran out in 3 months – New Homes </li></ul><ul><li>Get on Waiting List for $7,000 “New Home” Credit </li></ul><ul><li>Get on Waiting List for $5,700 “FTHB” Credit </li></ul><ul><li>Tax Credit Reservations can be made with executed contract if buying New Construction </li></ul><ul><li>Tax Credit DOES NOT mean you will pay NO State Tax – Alternative Minimum Tax may still be owed </li></ul><ul><li>Tax credit is NOT automatic – Must submit request within 2 weeks of close of escrow </li></ul>
  17. 17. California $10,000 Tax Credit Facts <ul><li>Wrap Up and Take Aways </li></ul><ul><li>We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs </li></ul><ul><li>Give us an opportunity to earn your trust if you have not already chosen a lender </li></ul><ul><li>We are more than happy to be your “second opinion” if you are already working with someone </li></ul><ul><li>We can recommend a qualified Real Estate Agent in your area that shares our values and expertise </li></ul><ul><li>We are committed to educating and empowering homeowners - Please join us for other classes </li></ul>
  18. 18. Thank You for Attending If you enjoyed this class – Tell a friend  <ul><li>Please tell us how we’re doing </li></ul><ul><li>Thank You email includes a link to “Praise” page </li></ul><ul><li>Your feedback is greatly appreciated </li></ul><ul><li>For more information </li></ul><ul><li>1-866-667-6724 </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul><ul><li>Branch Manager </li></ul><ul><li>Broadview Mortgage Corporation </li></ul>

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