IRS Cracking Down on False Tax Credit Claims
The IRS is cracking down on people who don’t qualify for the first-time homebuyer tax credit but try to claim it anyway.
The IRS says it is investigating 24 cases of people who falsely claimed the first-time homebuyer credit on their federal income tax returns. Getting caught making a false claim carries a penalty of up to three years in jail and a fine of as much as $250,000.
The First-Time Homebuyer Credit, enacted in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser must be someone who has not owned a primary residence in the previous three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse.
The home purchase must close before Dec. 1, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.
Think Tanks Predict More Renters
While most people think the worst of the housing crisis is over, there are some skeptics who predict that the industry will face further serious challenges.
A new analysis compares the cost of renting to the cost of buying and concludes that they are now close to equal. It also predicts that because of persistent joblessness there will be fewer buyers and more renters in the future.
The study, released Thursday by two think tanks — the Center for Economic and Policy Research (CEPR) and the National Low Income Housing Coalition (NLIHC) — also says current home owners with mortgages will remain underwater for “some time,” increasing the likelihood that foreclosures will continue.
“In communities where foreclosure remains a problem, home owners should be given the opportunity to remain in their homes as renters paying the fair-market rent,” says Dean Baker, Co-Director of CEPR and an author of the study.
Tips for Getting a Good Appraisal
Appraisals can be tricky these days. Here’s some advice from Maureen Sweeney, a Chicago-area owner of an appraisal firm, on getting an accurate and fair appraisal.
- Both the real estate practitioner and the owner should be present for the appraisal and follow the appraiser around. Make sure he doesn’t miss anything important.
- Ask questions to determine if the appraiser has identified the correct neighborhood boundaries and if she’s comparing the home to similar properties.
- Bring a copy of a recent tax bill and a survey of the property, and give them to the appraiser.
- Provide a list of improvements to the home.
- Offer your professional opinion about what makes this property worth more than other properties in the area.
6 Reasons Why Some Homes Sell
Why do some houses sell and others don’t?
There’s no ultimate answer to this question, but Tribune Media Services columnist Ilyce Glink has a theory.
Here are her six top reasons properties linger on the market:
- Lousy pictures on the Web.
- Priced too high for the neighborhood.
- Blah interior; ho-hum landscaping.
- Little online marketing and hard-to-find MLS listings.
- Low commissions. Practitioners make sure their customers see properties that offer a payoff.
- Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces.
Homebuyer Credit Gets New Life
Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.
Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.
