Surrounded by beauty

“You are the same today as you’ll be in five years except for two things: the books you read and the people you meet.”
– Charlie “Tremendous” Jones

Well, I generated some nice reaction last week with my plea that we all calm down!

Many thoughtfully wrote me about their opinions–and it all made me think. That’s one of the great benefits of community–we can challenge each other in a friendly, constructive way.

I’m sure we all wish our political community operated like that. But “it is what it is”, as they say…and, it’s my job (and my staff’s job) to make sure that YOU and your family don’t get smacked by the consequences of a tax code run amok. It’s why I write these blogs each week, and then move into making sure that I and my staff around here are fully-briefed on ensuring our clients (and their lucky friends) keep as much in their bottom line as legally and ethically possible.

Over the weekend, I was listening to NPR, and I briefly caught a story about something which is well worth 8 minutes of your time. It’s a thing of beauty. Perhaps you’ve already seen it? (2+ million already have on youtube.)

It’s the winner of “Ukraine’s Got Talent” (did you know such a show existed?), and she’s a “sand painter.”

See it here: http://www.youtube.com/watch?v=518XP8prwZo . It’s incredible, and will bring a touch of beauty to your day.

With her “painting” (done live) the artist recounts Germany conquering Ukraine in the Second World War. She brings calm, then conflict: A couple on a bench become a woman’s face; a peaceful walkway becomes a firefight; a weeping widow morphs into a memorial for an unknown soldier. She moves the judges to tears as she subtitles the final scene “you are always near”.

Before I moved on to some more specific thoughts for you, I thought you’d appreciate seeing that.

So, switching gears to this week’s Personal Strategy Note, I wanted to remind you of a few deadlines which are coming near…

(And, again–please do feel free to post comments. I read every one that comes my way!)

“Real World” Personal Strategy
Time Could Be Running Out…For the Pricing AND the Credit

The deadline is fast approaching to take advantage of the valuable federal tax credit for first-time homebuyers–worth up to $8,000 for 2009 purchases.

The “American Recovery and Reinvestment Act of 2009” made the first-time homebuyer credit more generous than a previous credit available for purchases made last year. For a qualified home purchase between January 1 and November 30, 2009, the maximum credit equals the lesser of:

* 10 percent of the purchase price of a principal residence or
* $8,000 (or $4,000 for those who are married but file separately).

To qualify for the credit, the home sale must close by Monday, November 30. Merely having a contract by that date is not enough.

To make matters worse, Thanksgiving falls on November 26 this year, which means a day off for most people involved in the home buying process (banks, title companies, home inspectors, attorneys and real estate agents). So there will likely be large numbers of homebuyers trying to find a property, secure a mortgage, and fit the closing in by November 30.

The National Association of Realtors estimates that the entire process can take up to two months. So…now could be the time to act.

“Am I Eligible?”

Eligibility for the credit is limited to those who haven’t owned a principal residence in the U.S. during the three-year period that ends on the purchase date. In the case of a married couple, both spouses must pass this test (even if they don’t file jointly). So you don’t really have to be a first-time homebuyer.

For a newly constructed home, the purchase date is considered the move-in date. To qualify, the residence cannot be bought from a spouse, parent, grandparent, child, or certain other related parties.

The credit is reduced or eliminated if “Modified Adjusted Gross Income” (MAGI) is too high. The phase-out range for single filers and married individuals who file separately is between MAGI of $75,000 and $95,000. For joint filers, it is between MAGI of $150,000 and $170,000.

Under the old rules, which expired on December 31, 2008, the credit was worth up to $7,500 and all homebuyers were generally required to repay it over 15 years. The Recovery Act eliminates the 15-year repayment rule for purchases between January 1 and November 30, 2009.

However, even under the new liberalized rules that apply for 2009, buyers may have to repay the credit if they sell or stop using the home as their principal residence within three years of the purchase date. In such cases, the credit must generally be repaid by remitting it with the tax return for the year the triggering event occurs. However, the amount due cannot exceed the gain from selling the home.

“Come on–this is the kind of thing that will get extended…right?”

Well, realtors and other organizations are lobbying Congress to extend the first-time homebuyer credit and even make it larger in order to continue the real estate market recovery. But with the government short of cash right now, I wouldn’t count on it. We’ll keep you posted of any developments.

And, of course–if you go for it, give us a call to make sure it’s done right!

I hope this helps!

R MendenSurrounded by beauty