Health Care: Small Business Health Care Tax Credit Video - April 2010

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Do you know what the Illinois Association of REALTORS® Governmental Affairs Department and the REALTORS Political Action Committee (RPAC) have done for your family and your business lately?
I am happy to report that we have already had a number of victories during the current legislative session. But we are not yet through this session:

* Ban private real estate transfer fees in Illinois with passage of the Transfer Fee Covenant Act
* Stop new proposed county recording fees on real estate
* Stop the expansion of onerous regulations and licensure of landlords
* Include foreclosures and short sales in the state tax code for assessment purposes

Added fees and new regulations directly impact your family & Buss. bottom line.

Fire service culture not to blame for problems:

Lt. Frank Ricci, of the New Haven, Conn., Fire Department, said during his keynote speech to the conference that the culture of the fire service is wrongly blamed for many of its problems.

Energy-efficient upgrades and to save energy by requiring high-efficiency equipment and products.

Documenting the Tax Credit:
The new tax code for 2009-10, which will offer guidance and clarifications on the credit, will not be available until early August. Here are the basic steps homeowners will need to follow to claim the credit:

Step 1: Fill out IRS form 5695. The IRS currently has the 2008 version of the form.

Step 2: Enter the information from form 5695 in the Tax and Credits section of form 1040.

Step 3: The taxpayer must keep the invoice for his or her files but does not need to submit it with the tax return. The amount for the qualifying improvement or equipment on this invoice would be used in form 5695. Klein says that remodelers should provide homeowners with a detailed invoice that includes serial and model numbers for the equipment or products.

If the work is part of a larger remodel, the remodeler will have to provide a separate section on the statement that covers the tax-qualified items, or can even create a separate invoice. According to the Energy Star website, the cost can include sales tax and, since the price of a credit is defined as what a home­owner pays for it, most tax preparers assume that a subcontractor’s markup can be included in the price. However, the IRS has not yet provided clarification on a remodeler’s markup of a subcontractor invoice.

Step 4: The taxpayer must keep the manufacturer’s certification for his or her files but does not need to submit it with the tax return. A manufacturer’s certification is a signed statement from the manufacturer stating that the product or component qualifies for the tax credit.

Though the IRS has not yet released guidelines on what information must be included in the certification, it recently announced that homeowners claiming the credit can temporarily rely on existing manufacturer certifications or appropriate Energy Star labels in purchasing qualifying equipment before June 1, 2009, until updated certification guidelines are issued later this year.

Until then, most manufacturers are using previous tax credit guidelines to create certifications. Many manufacturers offer online downloads of the certification. Subcontractors may also provide certifications.

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Do You Want To Get The Most Bang For Your Buck In Remodeling.
Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by Realtors® who completed a recent survey.
http://ping.fm/91lqX

You can compare national and regional averages for 33 popular remodeling projects; you can also download a PDF with project data for any one of 80 U.S. cities. To learn more about how the Remodeling 2009–10 Cost vs. Value Report was put together.

New Lead Paint Law:
The U.S. Environmental Protection Agency has established a new Renovation, Repair and Painting lead law that goes into effect April 22, 2010.

The new law requires contractors, property managers and others paid to replace windows or renovate residential houses, apartments and child-occupied facilities built before 1978 to be certified by the U.S. Environmental Protection Agency (EPA). This new law is intended to protect children from leaded dust that may result from disturbing lead-based paint.

The new Striker features a variety of design enhancements to make it one of the most innovative ARFF vehicles in the world, and enable airport firefighters ...

Illinois Home Sales Continue to Post Gains, Up 32.8 Percent in March
Median Price Holds Steady at $148,500

The Illinois housing market posted its seventh consecutive month of year-over-year home sales increases in March as the spring market heats up and the April 30 federal homebuyer tax credit deadline nears. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in March 2010 were up 32.8 percent, totaling 9,487 homes sold compared to March 2009 sales of 7,142 homes. The median price in March 2010 was $148,500, down 0.3 percent from $149,000 in March 2009. The median is a typical market price where half the homes sold for more, half sold for less.

Year-to-date January through March 2010, Illinois home sales were up 23.5 percent to 21,242 homes sold compared to 17,194 homes sold for the same period in 2009. The year-to-date median price was $144,600, off 0.3 percent from $145,000 in 2009.

Helping Homeowners with Financial Hardships Video: Your Graceful Exit

New York, NY, April 20, 2010 - According to a national online survey released today by the Ad Council, only a third of parents in the United States are very concerned that lead poses a health risk to their children. However, lead poisoning affects more than one million children in the United States. If not detected early, children with high levels of lead in their bodies can suffer from damage to the brain and nervous system, behavior and learning problems (such as hyperactivity), slowed growth, hearing problems and aggressive behavior.
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iPad First Look:

Out in Lake CO. IL. with client doing an inspection.

Cyber Alert: IRS Tax Scam Warnings:
Tax time cyber scam alert details and
what to watch out for now...

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Don’t Panic! Eight Things to Know If You Receive an IRS Notice:

The Internal Revenue Service sends millions of letters and notices to taxpayers every year. Here are eight things taxpayers should know about IRS notices – just in case one shows up in your mailbox.

1. Don’t panic. Many of these letters can be dealt with simply and painlessly.
2. There are a number of reasons why the IRS might send you a notice. Notices may request payment of taxes, notify you of changes to your account, or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.
3. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
4. If you receive a correction notice, you should review the correspondence and compare it with the information on your return.
5. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
6. If you do not agree with the correction the IRS made, it is important that you respond as requested. You should send a written explanation of why you disagree and include any documents and information you want the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.
8. It’s important that you keep copies of any correspondence with your records.

For more information about IRS notices and bills, see Publication 594, The IRS Collection Process. Information about penalties and interest is available in Publication 17, Your Federal Income Tax for Individuals. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Thank A Soldier:

ONE VIDEO, ONE VOICE YOUTUBE VIDEO:
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Waiting for my flight to Chicago.

Last Day of Sking

Having Lunch At 8500ft.

Having A Great Time in Steamboat

Hanging out in Stramboat.

View From Steamboat

Today Is The Day, I Hope Short Sales Go Smoother:
Home Affordable Foreclosure Alternatives Program: Overview
The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or deed-in-lieu.

In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer - provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.

HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.

Tax Tips: Last-Minute Tips - April 2010

Obama Administration Announces Enhancements to HAMP, FHA Refinances
House and Senate Approve Second and Final Health Care Bill
NAR Requests TALF Extension in Letter to the U.S. House Financial Services Committee
NAR Posts Webinar on Upcoming HAFA Program
Flood Insurance Update
NAR, ALTA call on FHA to Clarify Stance on Private Transfer Fees
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Understanding Federal Short Sales Rules Video

Image via Wikipedia

Home Affordable Foreclosure Alternatives Program (HAFA)

To help homeowners who are unable to keep their homes under the Home Affordable Modification Program, the HAFA program may make a short sale or a deed-in-lieu of foreclosure a viable option to help them avoid foreclosure. The HAFA Program, which will take effect on April 5, 2010, provides servicer, seller and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.

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• Don't foreclose! Do a short sale (money.cnn.com)

Economist's Commentary: Most Commonly Asked Questions on the Economy and Real Estate Market By Lawrence Yun, Chief Economist

1. How would you characterize the current state of the housing market?
It will be a fragile recovery. Existing home sales have come down from the brisk sales pace of late last year, when buyers rushed in to meet the original homebuyer tax credit deadline. Since then, sales have come down, though they remain higher than comparable months one year ago. The rush of buyers late last year greatly aided in bringing down inventory and has begun to stabilize home values. Inventory in recent months, however, has crept upwards. Home values are not declining as sharply as they have been for the past two years, but they are not yet on definitive positive ground either, broadly speaking. Some local markets, like Boston and San Diego, are ahead in the recovery process and have shown several consecutive months of positive price gains.

2. Is another surge in homebuying anticipated as the expanded and extended tax credit deadline approaches?
Yes. Remember that home sales had been falling for nearly 4 straight years, since the frenzy of activity in 2005. Then existing home sales squeaked out a positive gain in June of last year on a year-over-year basis as the tax credit stimulus finally filtered through the system. Sales then zoomed up 23 percent in October and by a whopping 43 percent in November. Sales still remain higher in more recent months compared to a year ago, but not with the same gusto. Based on last year’s experience with when consumers respond in big numbers, we will have to wait till May and June closings for the second surge to occur. (Consumers have to sign the contract to buy by the end of April, but must close by the end of June to get the tax credit for most homebuyers, depending on qualifying conditions.) I do expect the second surge to occur, but we’ll have to wait.

3. The Federal Reserve is ending their mortgage purchase program on March 31st, which has helped keep mortgage rates at essentially rock-bottom. How much will the interest rate rise when this program ends?
The Fed has been a major buyer of mortgage-backed securities. Without this buying, mortgage rates would have been higher- perhaps notably higher, particularly so in the early months of the massive financial crisis, back in late 2008 and early 2009. However, now with the financial market stabilized and banks making profits, there appear to be plenty of private investors who are willing to purchase government-backed mortgages. Just as the Fed steps away at the end of March, the mortgage rates need not rise notably if the private investors step in. I think this will be case. After all, getting about a 5% government-guaranteed return is much more appetizing than getting a 1% return on certificates of deposit. So if the private money flows into mortgages, then the mortgage rates could remain pretty much where they have been recently. However, keep in mind that the macroeconomic forces, unrelated to the previously-mentioned Fed mortgage program, will no doubt push all interest rates higher by the year end. The economic recovery induces the Fed to step off the gas pedal and raise interest rates. Furthermore, the massive U.S. budget deficit could soon push government borrowing rates higher, which then inevitably pushes up mortgage rates.

4. What happens after the tax credit goes away? Is the housing market toast in the second half of the year?
In the immediate months after the tax credit deadline, home sales will fall notably. The rush of buyers to meet the deadline will have left very few in the pipeline. The more interesting question is what happens in the several months after the tax credit deadline, say from October and onwards. The housing recovery will depend heavily on jobs and on whether consumers have regained their confidence about home buying. Job creation naturally brings housing demand. In addition, if the home values have definitively stabilized or even show some modest increases then the many people who have been on the sideline waiting for the bottom will no longer have any further reasons to wait. According to my estimations, there appear to be more than a usual number of renters with the necessary finances to buy a home, but have chosen not to because they did not want to purchase a depreciating asset. This suggests a bottleneck in pent-up demand. If home prices show several consecutive months of stability, then there could be a rise in housing demand from these financially qualified renting households. There is no guarantee, but job creation and the removal of the ‘fear factor’ regarding home prices will provide support when the tax credit goes away.

5. What will mortgage rates be in 2011?
By December of this year, the average mortgage rate could be close to 6 percent from the current 5 percent average rate. By December of 2011, the rate could be 6.5 percent. I do not foresee the rate going above 7 percent, at least for a prolonged period, in the next two years. The reasons for the increase are due to the macroeconomic forces of a recovering economy and a very high budget deficit. But relatively benign consumer price inflation will keep the lid on mortgage rates from rising too high. For those engaged in the jumbo market, you will note that rates are already that high. But the high rate on jumbo mortgages and on construction loans is due to the lack of government backing for these loans. From about the second half of this year, the banks will clearly have built up a strong capital buffer, and any further bank profit will then be used for lending to non-government backed sectors. So the mortgage rates on jumbo and commercial real estate could indeed fall a bit due to an improvement in the bank capital situation just as rates on conventional and FHA mortgages rise from macroeconomic factors.

Why The Apple Computer Is So Great.

Take A Look At This Video: