Home Buyer Tax Credit
I was wondering if any knows wether or not husband and wife each qualify for the $8K tax credit or are they considered one entity? Is there a limit to the number of individuals that can take advantage of the credit per transaction? i.e. husband, wife, and sister go in on the purchase together.
Thanks,
TAT
The tax credit is shared by all buyers. Husband and wife get the full $8K if both are first time home buyers and file a joint tax return.
Unrelated buyer share the tax credit. The property must be owner occupied. If two unrelated parties are buying their primary residence as first time home buyers, then each party would get a $4000 tax credit on their personal tax return.
Thanks newkid,
They came out with the form the next day, which pretty much explained everything.
Yep, a CASH business!
And the higher tax rates are likely to increase the probability of creating a nation of Tax Cheats.
The top rate of 39% is bad enough. Where is the rate going?
[addsig]
ok here is something that is pretty slick that could work for you.
Chattel appraisal, if you buy property that has been recently (within say the last two to three years) been remodeled or is new.
You can depreciate the chattel in the property which is significant taking 40% write offs the first year on 5 year chattel and the best part is that unlike straightline depreciation there is no recapture.
We have 200K properties with 30K in chattel in them and we were about to write off 12K year one..
[addsig]
Thanks a lot for all of your thoughts.
About the Chattel appraisal depriciation.
Can it be a primary resident?
Is there a minimum amount of time you must own the property to NOT have to pay back the recapture. Say I buy a SFR, depriciate all of the chattel in 5 years and sell in 6 years. Will I owe back the recpture?
What percent of the improvement value (house value) does chattel represent?? I know there is no exact number but is the average?
Does purchase price have any affect on a Chattel appraisal.
Say 2 exact homes are purchased. One for 200K now and one for 400K at the peak of the market a couple of years ago.
Will the Chattel appraisal be different for these 2 properties.
Your questions are merely academic. Holding rental property will not reduce your income tax liability.
The rental property deductions are taken against rental income. If you have more deductions than income, then you have a net rental (passive) loss. Your net rental loss will be carried over to the next tax year when it will be used to offset rental income. Because your taxable income is greater than $150K, you get no immediate tax relief from rental property ownership.
Your best bet is to look into pre-tax deductions such as a SEP IRA and medical holding accounts. Instead of giving your kids an allowance, maybe your store can hire them to do some chores around the store. Putting your kids "allowance" on your payroll, makes their allowance a business deduction which reduces your taxable income.
Consult your CPA for other options to reduce your tax liability next year.[ Edited by NewKidInTown3 on Date 03/06/2009 ]