REAL ESTATE BRIEFS

TAX CREDIT PROGRAM

Bankrate reports tax credit for buyers likely to be extended

According to Chris Kissell of Bankrate, it appears increasingly likely that Congress and the White House will extend the first-time homebuyer tax credit.

"Any program expansion can be considered a good thing for those seeking a primary residence," said Cameron Findlay, chief economist at LendingTree in Charlotte, N.C.

"Sales activity itself may not see a large increase," he said. "But we expect the mix of the sales to shift toward (the) primary residence owner."

According to reports, the Senate legislation would extend the existing $8,000 first-time homebuyer credit beyond its scheduled Nov. 30 expiration date and into the spring. A $6,500 credit also would be offered to existing homeowners who sell their current property and purchase a primary residence that costs $800,000 or less. To be eligible for the credit, move-up buyers must have lived in their present house for at least five years.

Income limits for the credit would increase to $125,000 for individuals and $225,000 for couples. Homebuyers who qualify must stay in their new homes for at least three years, or they will have to repay the credit.

To be eligible for the tax break, homebuyers would have to be under contract by April 30, 2010, with closings wrapped up no later than 60 days after the contract date.

Audit reveals taxpayer fraud in homebuyer credit program

According to the Greater Las Vegas Association of Realtors Web site, lasvegasrealtor.com, an audit was conducted by the Treasury Inspector General for Tax Administration to determine whether the IRS had controls in place to effectively identify erroneous claims for the first-time homebuyer tax credit.

It identified 73,799 first-time homebuyer credits attached to an original U.S. Individual Income Tax Return, totaling almost $504 million, that were claimed by taxpayers who had indications of prior homeownership. According to the audit, taxpayers had entered information on their individual income tax returns for one of the prior three years indicating they may have owned a home.

These entries included deductions for home mortgage interest, real estate taxes, deductible points and qualified mortgage insurance premiums.