July 2010

JUST SOLD! Multiple Offers! Stunning North Arcadia Pool Home!

This Stunning North Arcadia, Highland Oaks Home has Been Completely Remodeled…Complete with Gorgeous Mountain Views…The home offers a Smart, Bright Floor Plan with 3 Large Bedrooms, a Den, and 3 Baths…Recessed Lighting, Double Pane Windows, Rich Hardwood Floors, Crown Molding and Meticulous Attention to Detail are Found Throughout the House…Spacious Living Room with Built in Shelving…Spacious Formal Dining Room with Wainscoting and Large Windows…Huge Great Room Features High Ceilings with Wood Beam Details an Open Kitchen and Family Room…the Kitchen Features a Wide Center Island with Oversized Farmhouse Sink and Built-In Granite Breakfast Table, Top-of-the-Line Appliances Including a Double-Capacity Built-In Refrigerator, Beautiful Newer Cabinetry…Large Master Suite with Walk-In Closet and Spa-Like Master Bath with Double Sinks, a Jetted Tub and a Large Multi-Jet Shower…Newer Sparkling Pool and Spa with Natural Stone Details…Truly a Masterpiece in North Arcadia!

SOLD in 9 Days! Multiple Offers! Temple City Home on Large Lot!

Recently Remodeled Temple City Home…Temple City Schools…Immaculately Maintained…Remodeled Kitchen with Newer Cabinets and Granite Counters…Breakfast Nook…Large Window in Living Room…Recessed Lighting…Wood Floors Throughout Common Areas…Large Windows offer Plenty of Light…Bonus Room for Studying or Play…Separate Laundry Room…Spacious Yard…Walking Distance to Schools…A Great Family Home in Temple City!

California State Tax Credits for First Time Buyers and New Homes

Many home buyers were rushing in the last days of June to close escrow and qualify for the federal tax credit of $8,000 for first-time home buyers and $6,500 for repeat home buyers. If you were one of many buyers who were under contract on a home purchase by April, 30 2010, and waiting to close escrow, you still have hope. The U.S. Senate has passed a 3 month extension to allow buyers additional time to close, moving the deadline to close escrow to September 30, 2010. However, if you’ve missed these deadlines, you’re not out of luck, you may qualify for a California State Tax credit.

California State Tax Credits

In addition to the federal tax credit, the California Franchise Tax Board (FTB) is offering tax credits of its own to first-time home buyers and new home buyers in 2010. California has set aside a fund of $100 million for first-time buyers, and another $100 million for new home buyers. Those who qualify in both categories will receive their tax credit from the new home buyer fund, which is expected to last longer.

Even though the CA tax credits are still available, time is running out. As of June 29, 2010, the first-time buyers fund is estimated to have reached almost $106 million. The new home buyers fund is estimated to have reached $50 million. As a first-time home buyer, you still have additional time if you are purchasing a new home. These figures are only estimates, as the California Franchise Tax Board assumes that there have been multiple duplicates sent in, and continue to accept up to 28,000 applications (currently at 20,760) until further notice.

The amount of tax credit you can receive is equal to 5% of the purchase price or $10,000, whichever amount is less. It must be applied over 3 successive tax years, with a maximum of $3,333 per year. They are nonrefundable and cannot  be carried over.

To qualify for these tax credits, a buyer must have completed a purchase of a qualified principal residence on or after May 1, 2010, and before January 1, 2011. As long as escrow closes on or after May 1, 2010, you qualify, even if you entered into a contract before that date. For the purposes of both tax credits, a “qualified principal residence” is defined as:

1. A single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been “purchased.”
2. Be eligible for the California property tax homeowner’s exemption.
3. Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
4. NEW HOME ONLY: Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.

You are NOT eligible for these tax credits if any of the following apply:

• The taxpayer was allowed a 2009 New Home Credit.
• The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
• The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
• The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New home buyers are also allowed to make a reservation on a New Home Tax Credit if they have entered into a contract on or after May 1, 2010, and on or before December 31, 2010.

The following steps must be taken to apply for the tax credits. Applications are accepted by fax only.

Within two weeks (14 calendar days) after the close of escrow:

• The seller must complete Parts II, III, and also Part IV (if the home has never been occupied) of Form 3549-A, Application for New Home / First-Time Buyer Credit, and provide a copy to the buyer or escrow person.
• The buyer will complete Parts I, V & VI of Form 3549-A.
• Fax the completed Form 3549-A and the final settlement statement (generally the buyer’s HUD-1 statement) to FTB at 916.855.5577.

California FTB recommends that the escrow company, on behalf of the buyer, fax the completed application and settlement statement to FTB and provide a copy to the buyer. The buyer retains ultimate responsibility to ensure the completed application and settlement statement are submitted timely to the FTB.

After applying, to claim the tax credit, you must have received a Certificate of Allocation from FTB.

An important thing to note: Special rules apply to married/registered domestic partner taxpayers filing separately, in which case each spouse/registered domestic partner is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.

Please see http://www.ftb.ca.gov/individuals/new_home_credit.shtml for more details.

Good luck to all the first-time and new home buyers out there! And remember to always contact your CPA about any tax questions as we’re not tax professionals.