Did You Know? You might pay health care tax on your house sale.
Did You Know?
For individuals making over $200,000 and couples making over $250,000, you may be subject to a new health care tax of 3.8% on your primary residence if you decide to sell it. The new investment tax is thanks to the newly imposed health care bill. If the proceeds on your sale top the normal pre-existing exemptions and capital gains, you are now subject to an additional 3.8% tax on your sale.
Of course, if you decide to sell your investment property, you also get to pay the 3.8% health care tax on capital gains.
SOLD - 28412 72nd Dr NW, Stanwood - $279,000
MLS# 9484
28412 72nd Dr NW, Stanwood
Sold for $279,000 & seller paid all closing costs!
Hot deal in Stanwood on huge lots! Monster sized back yards! Quality construction ramblers! Price roll back! Built in 2008. USDA zero down area! Huge Kitchen! Bonus and bedroom over garage! Laminate flooring! Vlted ceilings! Stainless apps! 2 car garage. 3BR 2BA + den and bonus room over garage!
Distressed Sales on the Rise Again.
Distressed Sales Again on the Rise, Reaching 29% in January and Nearly 1 Million Distressed Sales During the Last Year
CoreLogic released its first monthly report on distressed sales activity. The report below indicates
that distressed home sales – such as short sales and real estate owned (REO) sales – accounted for 29 percent of all sales in the U.S. in January: the highest level since April 2009. The peak occurred in January 2009 when distressed sales accounted for 32 percent of all sales transactions (Figure 1). After the peak in early 2009, the distressed sale share fell to 23 percent in July, before rising again in late 2009 and continuing into 2010.
Distressed sales are non‐arms length transactions such as REO or short sales. Market sales are arms‐length transactions between a willing buyer and willing seller and they exclude distressed sales. Distressed sales have a very strong influence on home price trends and are an indicator of a housing market’s health.
CAPITAL GAIN TAX INCREASES ARE COMING!
The following article is courtesy Ken Tharp with Iowa Equity Exchange. To read the entire article, please visit http://www.iowaequityexchange.com/Page.aspx/52.
Apr 9, 2010
Look out ahead, folks! The combination of two upcoming changes to federal capital gain taxes will have a tremendous impact on those of us who own land, invest in real estate, own stocks or mutual funds, or receive other types of investment income.
Beginning January 1, 2011, the tax cuts instituted during the Bush presidency will expire. As that relates to capital gain rates, the result will be an increase from the current 15% to 20%. (A 33% increase!) In addition, there is a small provision within the thousands of pages of legislation of the new Health Care bill that President Obama signed into law on March 23, 2010, that also impacts federal capital gain taxes. The bill includes a 3.8% “Medicare payroll tax” on capital gains and other investments. The 3.8% increase takes effect on January 1, 2013. It does have some income threshold requirements; i.e., your income must be over a certain level for it to apply to you. Added together, these two changes will result in a federal capital gain tax rate of 23.8% for many Americans, nearly a 60% increase over today’s 15% rate!
It appears to this author that if you were ever thinking of selling land or investment real estate without using a Section 1031 exchange, the remainder of the year 2010 might be the time to do it. You can avoid the jump from 15% to 20% that happens at the end of 2010 if you close your transaction prior to December 31, 2010.
Keep in mind that you can still avoid paying 100% of those taxes today by utilizing a Section 1031 exchange.
Here is an example: Bob bought his dream plot of land in 1990 - 160 acres at $600 per acre, for a total of $96,000. That number represents that basis in his unimproved land. Today, his dream has changed and he is ready to sell to a buyer at $1,700 per acre, or $272,000 total. The difference between $272,000 and $96,000 ($176,000) is Bob’s capital gain. His tax liability on this gain will depend upon when the closing occurs. Prior to the end of 2010, at 15%, the tax would be $26,400. After January 1, 2011, when the rate goes to 20%, the tax would jump to $35,200. And after January 1, 2013, if the Medicare kicker applies to Bob, the full 23.8% applies. Federal capital gain taxes would be $41,888, over $15,000 more than today’s 15% rate. In all of those cases, Bob can defer the full amount of tax through the use of a Section 1031 exchange and investment into a new dream plot, other investment real estate, or even some types of passive real estate investments.
As you contemplate these upcoming changes, remember that the facts above only refer to federal capital gain tax implications. There are two other factors to remember. First, if your property is improved in any way (for example, fencing, tiling, or structures of any kind), you will be required to recapture any depreciation you took or were entitled to take, even if you did not take depreciation! Second, do not overlook the impact of your state’s capital gain tax, if any. In the state of Iowa, for instance, the capital gain tax is 8.98% for nearly all transactions.
If you have questions, please feel free to get in touch. This is a fluid situation so it is difficult to know all of the answers, but we will make every effort to help you formulate a reasonable plan of action. This information should not be construed as tax or legal advice and you are strongly urged to discuss your personal situation with your trusted advisors.
7725 278th Place NW, Stanwood - $299,937
7725 278th Place NW, Stanwood WA 98292
MLS 52734
Offered at only $299,937!
Check out the virtual tour and photos! www.tourfactory.com/603416
Welcome home to a long list of standard features and upgrades.
This beautiful home features a spacious, open living room with gas fireplace, classic hardwood floors and slider to unobstructed views of Port Susan, Olympic Mountains, City of Stanwood and so more. The gorgeous deck features view panels to enhance the sights and has been recently refinished for years of use! The back deck wraps around for additional space and room to entertain. Truly a great way to enjoy the scenery.
What a kitchen! An open configuration features plenty of cabinet space, a view of the sound from your kitchen sink, oversized pantry for storage and gas cooking. Just out the back door you can grill away on your BBQ, which is also plumbed for natural gas!
The living room wouldn’t be complete without vaulted ceilings and CAT5 wiring for your surround sound theatre system, which is hidden from view! This upgraded wiring has been run throughout the house, even to the master suite!
The dining area is a great addition for any home and offers easy access to the deck for summer BBQs from both the slider and back door. Imagine enjoying the view of the water and sound while enjoying a good meal with friends on your beautiful deck.
Your deck has also been previously wired for a surround sound stereo system and separate volume controls and is newly refinished!
The backyard is level, partially fenced and offers ample space for a garden or enjoying time outside.
Your master suite is a retreat to come home to. It features a private bath, walk-in closet and picture window to complete the feel. Plus, the master is located on the back of the home for additional privacy.
Natural gas fireplace is surrounded by sturdy 12”x12” tile and keeps you cozy in the winter months.
With all the upgrades and features this home has to offer, it’s affordable and energy efficient too with all natural gas heating and cooking!
And don’t forget the lush landscaping as you approach. The additional color in the flower beds makes any entrance complete.
Act now to take advantage of the tax credit. Remember, you need to be under contract by April 30th and close the sale by June 30th. Hurry, there’s still time!
HUD Redefines “Foreclosed” to Include 60-Day Delinquencies
04/02/2010 By: Carrie Bay
HUD’s got a big red editing pen in hand and is going to work on what we’ve all understood to be the traditional meaning of foreclosure. The federal agency announced Friday that it is changing how it defines foreclosed to include properties in default and abandoned to include homes with lingering code violations.
Effective immediately, HUD is classifying any property that is at least 60 days behind on the mortgage or the property owner is 90 days or more delinquent on tax payments as a “foreclosed” home.
In addition, HUD is expanding the definition of an “abandoned” property to include homes where no mortgage or tax payments have been made by the property owner for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective actions within 90 days of notification of the deficiencies.
HUD officials say the new wordsmith-ing will help communities acquire, rehabilitate, and re-sell foreclosed and abandoned properties more quickly under the Neighborhood Stabilization Program (NSP) and help prevent further decline in hard-hit neighborhoods.
The changes come just as reports are surfacing that states and local municipalities have spent less than half of the $4 billion available through the NSP initiative to buy up distressed properties in their communities.
According to the Associated Press, as of March 16, only 38 percent of the grant money had been “obligated,” meaning a municipality has a formal contract at a specific address
in place to purchase a foreclosed or abandoned home. The state and local governments must commit the money to projects by September or the funding is lost, the news agency explained.
HUD says its new expanded definitions will increase the reach of NSP by allowing more properties to qualify and will remove existing barriers caused by market conditions.
“The original NSP rules…limited the impact of the Neighborhood Stabilization Program and we’ve heard that clearly from our partners on the ground,” said HUD Secretary Shaun Donovan. “The rules needed to be more flexible so our local partners can put taxpayer dollars to work quickly to stabilize neighborhoods hard-hit by foreclosure.”
HUD previously defined the term foreclosed to apply only to properties where the foreclosure process was completed. Local communities suggested this narrow definition was not a good fit for market conditions since many properties were lingering in the foreclosure process and beyond the reach of NSP.
Properties will now be eligible for NSP assistance if: the mortgage on the property is 60 or more days delinquent and the owner has been notified; the property owner is 90 days or more behind on the taxes; or foreclosure proceedings have been initiated or completed under state or local law.
The word abandoned was previously defined as a property that had been foreclosed upon and was vacant for at least 90 days. This definition effectively excluded properties abandoned by owners but where tenants were still in place, precluding local communities from assisting the properties with NSP funding or protecting the tenants’ occupancy. HUD determined this limitation was a substantial barrier to the preservation of existing affordable housing.
To address this limitation, HUD is now also classifying “abandoned” as a home where mortgage or tax payments are overdue by at least 90 days, or a home that has received a code violation that makes the property uninhabitable and no remedial action has been taken to bring it up to code for 90 days.
SOLD - 11420 228th St NE, Arlington - $264,900
Escape the ordinary & live the way you want!
11420 228th St NE, Arlington, WA 98223
Offered at $264,900
MLS# 30663
Escape the ordinary & live the way you want! Plenty of room to roam on this shy 3 acres w/private entrance. Ideal property w/level pasture, fruit trees, mature evergreens for privacy. Features open kitchen, multiple living spaces & tons of room for all! Extra clean & ready for move-in. Property also offers large detached 2 car garage w/workshop in back. Add’l oversized garage w/storage above and even more covered parking. These beautifully wooded grounds are worth owning. Financing available.
Visit www.tourfactory.com/588998 for additional photos. Please call or email me with any questions!
Want to see this add on the go? Text 66958 to 79564 in order to see a mini version on your phone!
Jen Hudson
206-293-1005 cell
360-652-1200 office
jen@jenhudsonhomes.com
CCIM Candidate, CDPE, GRI, Realtor
Windermere Real Estate/M2, LLC
Want to learn more about real estate? Visit my website at www.jenhudsonhomes.com
Bank of America Sued by Homeowners for Withholding Federal Bailout Funds
SEATTLE, March 23 /PRNewswire/ — Washington homeowners today sued Bank of America (NYSE: BAC) claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure, say attorneys with Hagens Berman Sobol Shapiro.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080317/AQM144LOGO)
The case, filed in U.S. District Court, claims that Bank of America systematically slows or thwarts Washington homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.
“We intend to show that Bank of America is acting contrary to the intent and spirit of the TARP program, and is doing so out of financial self interest,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro.
Bank of America accepted $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default.
Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuit, hasn’t lived up to its obligation.
According to the U.S. Treasury Department, Bank of America services more than 1 million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification.
“We contend that Bank of America has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank’s financial interests,” Berman said.
The complaint notes that part of Bank of America’s income is based on loans it services for other investors, fees that will drop as loan modifications are approved. The complaint also notes that Bank of America would need to repurchase loans it services but has sold to other investors before it could make modifications, a cumbersome process.
According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.
Named plaintiffs and Seattle residents Kamie and Daniel Kahlo contacted Bank of America last year asking to make new arrangements to reduce their monthly loan payments.
According to the complaint, Bank of America told the Kahlos they would not qualify for a home-loan modification unless they were delinquent on payments. Following the bank’s direction, the family let payments lapse to meet the bank’s requirement. Soon after, they asked Bank of America for a loan modification, providing all necessary documentation requested by the lender.
The suit charges the bank, in turn, issued new terms and conditions to Kahlo’s home loan agreement, which the couple honored. Several mortgage payments later the Seattle couple discovered the bank failed to make permanent modifications to their home loan as promised. The Kahlo family also paid an upfront fee of $1,400 to modify their home loan as required by Bank of America. Such fees are prohibited under federal regulations of the Home Assistance Modification Program (HAMP).
“Bank of America came up with every excuse to defer the Kahlo family from a home loan modification, from stating they ‘lost’ their paperwork to saying they never approved the new terms of the mortgage agreement,” said Berman. “And we know from our investigation this isn’t an isolated incident.”
Bank of America continues to ignore TARP regulations and instead creates more financial pressure on homeowners, the court filing states.
The lawsuit charges that Bank of America intentionally postpones homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.
Homeowners in Washington state with mortgages through Bank of America are encouraged to contact Hagens Berman if they received an inadequate response from the bank for a home loan modification request after April 13, 2009. For more information or to join the lawsuit, please visit: www.hbsslaw.com.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in San Francisco, Seattle, Chicago, Boston, Los Angeles, and Phoenix. Since 1993, HBSS continues to successfully fight for consumer rights in large, complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com.
Did you know? FHA changes & seller paid closing costs are changing.
Did you know?
On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25% and the amount of money that a seller can return to the buyer from their sales proceeds will be reduced from 6% to 3%.
Combine those new changes along with the expiration of the $8,000 or $6,500 Tax Credit and you could be losing thousands of dollars by waiting.
Thought you might want to know.
SOLD - 7808 85th Ave NE, Marysville - $237,000
MLS# 29146200
7808 85th Avenue NE, Marysville
$237,000 with all closing costs, new appliances & repairs included!
$8,000 Buyer Bonus!! New home that backs up to Native Growth! Open floor plan with 3 spacious bedrooms and walk-in closets. This home has a loft upstairs and large backyard. Built green. Close to schools, shopping, restaurants and parks. Live in style in this beautiful home. Special financing through Quadrant home loans. Previous model that has never been lived in. Visit us at our office just next door to view this wonderful home!