We Educate and Empower Homeowners to Make More Informed Decisions
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
We Educate and Empower Homeowners to Make More Informed Decisions
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
Ticking Time Lines & Availability of Funds
• Must Purchase (Close Escrow) After May 1st, 2010 and Before December 31st, 2010
• Or enter into an Enforceable contract executed on or before December 31st, 2010 and Closes by August 1st, 2011
• Reservations are taken on first-come-first-served basis
• Previous Tax Credit funds lasted only 3 months before exhausted
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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 31st, 2011
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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 31st, 2010 – Amended OK
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
How Credit is Claimed
• 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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
How Credit is Claimed
• “The tax credits cannot reduce regular tax below the tentative minimum tax (TMT)”
• Consult your Tax Professional about AMT
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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 30th, 2010 and close escrow by June 30th, 2010 for Federal
• Must close after May 1st, 2010 for CA State credit
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
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
We Educate and Empower Homeowners to Make More Informed Decisions
California $10,000 Tax Credit Facts
Wrap Up and Take Aways
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We Educate and Empower Homeowners to Make More Informed Decisions
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For more information
1-866-667-6724Homeownership Educator
Scott SchangBranch Manager
Broadview Mortgage Corporation