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Posts tagged ‘short sale’

Last-Minute Real Estate Tax Deductions For Homebuyers

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If you’re a homeowner, or looking to buy soon, here’s what you need to know about your tax burden for 2016.

Let’s face it: The last thing you want to worry about after that second glass of eggnog during this year’s holiday festivities is what you might need to deal with during next year’s tax season. But it’s well worth paying attention to real estate tax deductions now so that you can save later.

In the summer of 2015, a Senate committee approved many tax extender bill provisions into 2016. The bill extended a collection of tax-related deductions and credits that had expired, and this could give taxpayers a break through the end of 2016 if the bill is fully passed by Congress before the end of the year.

This act amends sections of the IRS tax code and can change what you’ll owe come April. Yes, the extenders bill is packed with many tax breaks targeted to special interests, such as the research and development credit, so you may be tempted to think the changes don’t apply to you — but they do!

If you own a home or are hoping to close on a home for sale in Santa Fe, NM, your tax picture for 2016 may look different than it did previously. Here are a few of the breaks up for consideration in Congress that could help lower your federal tax bill.

Mortgage debt forgiveness

When a mortgage lender writes off all or any part of a forgiven debt, the amount that is forgiven is “passed back” to the borrower as taxable for federal income tax purposes. The rule applies to all debt, including home mortgages. However, in 2007, in the midst of the housing crisis, Congress pushed through the Mortgage Forgiveness Debt Relief Act, which allowed for an exemption.

Under the rule, qualifying homeowners who have either lost their homes to foreclosure or qualified for some kind of repayment adjustment don’t have to pick up the forgiven debt as income on their tax returns. The rule was intended to be temporary but has been renewed several times, and Congress is currently debating whether it will renew this rule for 2016.

Deduction for mortgage insurance premiums

In a tough market, lenders are a bit more cautious. Buyers who financed homes in the last few years found that many lenders required private mortgage insurance (PMI) to protect the lender in the event of a default.

But here’s the rub: Even though the lender required you to purchase PMI as a condition of getting a mortgage, you couldn’t write it off. Unlike the interest paid on your mortgage, mortgage insurance payments are generally not deductible for tax purposes.

It was possible to claim and deduct PMI payments in 2015. If the tax extenders bill is approved and enacted through 2016, those who qualify and itemize may now claim a tax deduction for the cost of paying PMI for their homes.
– Read more at: http://www.trulia.com/blog/2015-real-estate-tax-deductions/#sthash.VD5ghDIL.dpuf

Source: Last-Minute Real Estate Tax Deductions For Homebuyers – Money Matters – Trulia Blog

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3 Key Tax Deductions Renewed for Homeowners

Thought this would be helpful at this time of year…

If you are anticipating a rough year when it comes to filing taxes, don’t turn those forms into new year’s confetti just yet. Several key provisions for homeowners have been retroactively renewed for 2014—and they might provide you with some much-needed tax relief.

If you did any of these three things in 2014, you still have reason to celebrate (OK, maybe not really celebrate, but celebrate as much as anyone can while doing taxes).

Short sale

In the third quarter of 2014, 8.1 million homes in the United States were seriously underwater, according to the real estate research firm RealtyTrac. If you were a homeowner who decided to short-sell your home last year, it’s not all bad news: Congress once again extended the Mortgage Forgiveness Debt Relief Act.

read more two more via http://www.realtor.com/advice/three-key-2014-tax-deductions-still/?MID=2015_02_MonthlyNewsletter_2010-13_sl1_ro&RID=10250946&cid=eml-2015-02-MonthlyNewsletter-sub2_renewed-blogs_buy

Short Sales: Answers for First-Time Buyers | Trulia Pro

Short Sales: Answers for First-Time BuyersMarch 2, 2012

Many people in the market today are first-time home buyers who would not have been able to buy when home prices were higher. Enticed both by lower prices and bank promotions, these eager hopefuls are have taken the signs of deals as the best chance to make their first real estate move  .While all home buyers need help with the short sale process, it’s especially challenging to address the needs and concerns of a first-time home buyer who has decided a short sale is the home for them. Here’s how to get answers to first-time home buyers’ top three questions about short sales.

1. How long does it take for a bank to approve a short sale? This is the million-dollar question. While it takes an average of three to six months, the timeline – and the process – vary quite a bit from one bank to another.Short sale approval timelines depend on the bank some just take longer than others. While each bank has different short sale guidelines, the short sale has to make sense to the bank. The more sense the short sale offer makes to the bank, the faster the approval process.Here are some things that slow down the process by several weeks or more – these usually involve more people or more factors:Multiple liens on the propertyA third party negotiating the short sale on behalf of a seller. Some states allow third parties to do this, for a fee; some states, like Virginia, limit this to real estate licensees, attorneys, and employees of attorneys.  Private Mortgage Insurance PMI on the propertyAdditional investorsAction: To make an accurate prediction about the short sale timeline for a particular property, research the bank’s general timelines, the property’s liens, and whether there is PMI before writing the offer.

2. Will the bank make repairs to the property? The short answer is, probably not.Here’s why:The bank does not have possession of the property and has no authority to make repairs on behalf of the seller.Many short-sale sellers do not have the financial means to make repairs.Many banks require the short sale to be sold strictly “as-is” and do not allow the seller to pay for any repairs.Why wouldn’t a bank allow the seller to make repairs? your buyer may ask. A short sale is a sticky situation for a bank, and that the bank wants to avoid potential liability. For example, if the bank allowed the seller to make repairs and the repairs proved to be faulty, the buyer might potentially hold the bank liable, since the seller doesn’t have money which is how the short-sale situation came about in the first place.Action: Find out how the bank and the seller feel about making possible repairs. A short-sale buyer needs to understand that the home will most likely be sold strictly “as-is” and all repairs will be at their expense.

via Short Sales: Answers for First-Time Buyers | Trulia Pro.