Comments on: First Time Home Buyers Are Cry-Babies

By: watcherkatt

watcherkatt — Thu, 03 Sep 2009 00:38:33 +0000

hey tax girl there is a dirty little secret the IRS is withholding all those payments. It now takes 4,5,6, months to get your rebate. I wonder what is up? has the IRS sent out checks to people who dont meet the requrements so now they are punishing us all? IRS has its collective finger up its butt. but no checks.

By: Democrats Offer Up Version of Tax Bill | taxgirl

Democrats Offer Up Version of Tax Bill | taxgirl — Sun, 18 Jan 2009 01:22:11 +0000

[...] The Earned Income Tax Credit (EITC) would also be increased. Also on tap is a withdrawal of the repayment requirement for the first-time home buyers credit. [...]

By: Miranda

Miranda — Fri, 22 Aug 2008 12:48:42 +0000

Thanks, Rick, for correcting my math. Things have been a little stressful around here for me. At any rate, I agree that it might have helped, but collection and enforcement would have been a pain.

By: Kelly

Kelly — Thu, 21 Aug 2008 03:05:33 +0000

Oxnate,
Actually, my figures were off… You don’t have to begin repayment until 2 years after the initial credit (I forgot to work those 2 years into my calculations). With that, the interest would total 5,346.81 at 7%.

By: Another Tax Geek, CPA

Another Tax Geek, CPA — Thu, 21 Aug 2008 02:09:25 +0000

Oxnate,

I think you’re correct as far as the recapture of the credit in subsequent years. But when sold, if a gain, the remaining balance is due, and if a loss it’s forgiven (a sweet deal, too bad my lender doesn’t make such offers….). This is where I see do-it-yourselfers struggling. Can’t wait to see the form the IRS will design for this. I’m guessing it will be somewhat similar to the casualty loss form.

By: Matty

Matty — Wed, 20 Aug 2008 16:36:15 +0000

This legislation is ridiculous – can’t we all agree that we need to fire our congressman in November, and i mean ANYONE that is currently in office and coming up with this garbage. It isn’t a partisan issue, they are ALL idiots! A couple more years of this and the Middle East won’t just be buying NYC real estate (like the Chrysler building and the W hotel, let alone about 75% of the new construction of apts in manhattan), they’ll be branching out to your hometown! Then maybe the average american will realize what having such a weak currency means!

By: Oxnate

Oxnate — Wed, 20 Aug 2008 13:43:50 +0000

Well, say what you will but this bill was the tipping point for me. I was already planning on looking for houses after this next tax season, but when I ran the figures it just made sense to take advantage of this now. My figures used 6.35% so I’m only saving $3,700. But that is still a wonderful “gift” from Uncle Sam.

And I’m not whining at all.

As far as repayment goes, I was of the impression that it would be a “additional tax” line on the 1040. But on repayment on sale of the house, you’re probably right about how bad those will be.

-Good Luck and Happy Hunting

By: Rick

Rick — Wed, 20 Aug 2008 13:42:25 +0000

Miranda,

I think you have a decimal point in the wrong place. 10% of $75,000 is $7,500, I am guessing you bought your house for more than $18,700. This could actually work, what do you when you buy a house, you buy curtains and paint and furniture etc. It really won’t help with the down payment but will enable folks who did buy a house in this time period to not be so strapped to buy that stuff. It will be a royal pain to enforce and collect, the IRS is going to need a little more help.

By: Miranda

Miranda — Wed, 20 Aug 2008 11:42:46 +0000

Great analysis of the tax credit! I haven’t been a real fan of all this “stimulus” stuff — mainly because I think we’d do better with a little tough love and shifting our economy away from always spending money. As Urbie points out, this probably isn’t going to be the tipping point for anyone.

And don’t forget that the credit is up to $7,500 or 10% of the purchase price, whichever is lower. SO, if my home were eligible, I would have got a $1,870 tax credit — money that I could easily have got for an addition to my down payment with a little planning or by raiding my emergency fund. Money that I wouldn’t have had to pay back at all, and that would have served the same purpose in reducing the amount I paid in interest.

By: Urbie

Urbie — Wed, 20 Aug 2008 11:21:32 +0000

I agree it’s hogwash, but mostly just because there’s no way people are going to say, “Hey, let’s go out and buy a house, because we get $7500 off our tax bill for buying!”

My wife and I would probably qualify — we used to own our home, but haven’t in 9 years (long story — we moved, then bought a piece of land with the intention of building a house, never built it, then moved again — so we live in another state, yet still own the land… go figure!). But there is absolutely no way this tax credit is going to enter into our decision-making process for whether or not we buy a house this year or next; that’s going to hinge on other factors (like what kind of jobs we have, etc.). The politicians who enacted this bill just want to be able to say, “Look what we’ve done to ease the housing crisis,” etc. It will accomplish little except to increase the federal deficit — people who were going to buy houses anyway will do so and now get a tax credit, but people who weren’t going to buy houses are not going to do so just because of the credit. It’s stupid.

Urb