January 15, 2010 - IRS issues home buyer tax credit guidance and Form 5405
New Homebuyer Credit Form Released; Taxpayers Reminded to Attach Settlement Statement and Other Key Documents
>>> DOWNLOAD IRS FORM 5405 IN PDF FORMAT HERE
WASHINGTON — The Internal Revenue Service today released the new form that eligible homebuyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time homebuyer credit.
The new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit.
With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.
The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February after it completes the updating and testing of systems to meet the law’s new requirements. The updates allow the IRS to put in place critical systemic checks to deter fraud related to the homebuyer credit.
Some of these early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks.
In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement showing all parties' names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
- For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
In addition, the new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. To qualify, eligible taxpayers must
Read more...NAR: Home Sales Continue to Rise
December 22, 2009, from the National Association of Realtors: Home sales rise 7.4 Percent.
The federal Real Estate Settlement Procedures Act ("RESPA") concerns the disclosures and settlement procedures to consumers when applying for and closing on a mortgage loan and real estate. For the first time in more than 30 years the United States Department of Housing and Urban Development ("HUD") has implemented new RESPA rules ("Final Rule").
The Final Rule and forms were published by HUD on November 17, 2008. Most of these changes will be required to take effect on January 1, 2010 however much of the Final Rule became officially enacted on January 17, 2009 and it's provisions can now be used, including the new HUD1 Uniform Settlement Statement ("HUD1") and new Lender's Good Faith Estimate ("GFE").
It should be noted that there are currently a few lawsuits and further discussion regarding a small number of the proposed changes, including the "required use" provision, so these items might be further modified [Update: HUD has withdrawn the "required use" provisions]. Indeed several rules were dropped from the Final Rule, including the use of a "closing script" that would have been required to be read aloud at the settlement table and which potentially could have added an hour of time spent at each real estate closing. Instead HUD has created a third page on the new HUD1. However, even though the "closing script" was abandoned and a few modifications might still be made, as of January 17, 2009 nearly all of the Final Rule provisions were enacted.
Read more...Although the following could apply anywhere along our open bays, marshlands and/or estuaries, we'll pretend it actually occurred along the Metedeconk.
The house and land were picturesque, material suitable for a New Jersey Shore vacation postcard. The property was purchased in the late 1960's for cash. The owners, now empty nesters, decided to sell and accordingly listed it with a local Realtor. Soon thereafter an offer, sizeable in amount, was tendered and much to the delight of the sales agent involved it was accepted. The closing process was expedited to accommodate the anxiousness of all parties involved especially the buyer who constantly had visions of parking his power boat next to the 16 foot dock extending into the Metedeconk.
And then the bad news arrived!
It came in the form of an exception to title insurance coverage as identified in the title binder issued by a local title company. Specifically, and in painful detail, a State Tideland's claim was identified affecting the dock, bulkhead and much of the adjoining land heretofore thought to belong to the current property owner. A cloud on title resulted and a quick closing did not.
New Rates Effective March 1, 2009
New title insurance premium rates went into effect on March 1, 2009 in New Jersey. For title insurance premiums a new STANDARD RATE now replaces both the BASIC RATE and REISSUE RATE. The REFINANCE RATE and other premium rates remain as is. To calculate the new premium rates, click here.
