Oct 30 2009
Extension of Home Buyer Tax Credit Likely – Michael Dolezal, CPA
With 1.4 million taxpayer claims and a cost of $10 billion dollars through August 2009, the First time home buyer tax credit will likely be extended through the middle of next year 2010. Stakeholders from both the National Association of Realtors and the Mortgage Brokers Association have urged congress to extend the tax credit through 2010.
On October 20th, NAR’s Vice President, Ron Phipps addressed the Senate Banking, Housing and Urban Affairs Committee. Phipps commented that the home buyer tax credit has had an impact with increasing sales in recent months and projects 5.1 million home sales for the year, nationally. He noted, “But it is a fragile recovery, and now is the time to build on home sales momentum by extending the tax credit throughout 2010 and expanding it to all home buyers,”
Although congress is leaning to extend the credit, the Obama administration is concerned about the cost of extending the credit.
Another concern of the administration has been the scrutiny the program has received for fraudulent claims. The IRS has opened 107,000 exams of questionable claims, and have identified 167 criminal schemes involving the tax credit since enacted in February 2009.
Several versions of credit extension remain in debate. House Majority Leader Steny Hoyer-D-MD, favors extending the credit through the end of the year. A bipartisan effort proposal would extend the credit an additional six months, extend the credit to all homebuyers, and raise the income limitation caps to $150,000 for individuals and $300,000 for those filing jointly. This version has been stalled due to congressional politics as the republicans have tried to attach the extension amendment to the recent unemployment bill, which the democrats do not favor.
With the current credit expected to expire on November 30th, 2009 it is likely the administration and congress will pass an extender bill which will most likely extend the credit through May 2009, although I believe the final version will not include the amendment to extend the credit to all homebuyers.
Call me for more information about First Time Home Buyers Tax Credit, or if you have questions regarding your tax situation or real estate concerns, please contact our office.
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