Hold on to your lugnuts, the IRS is getting ready unlock and load!

August 17, 2010 By Michael

Sorry people, but it looks like the party is just about over. That is, if you enjoyed the low capital gains tax rates extended by George W. Bush and set to expire and the end of this year (2010).

Check-out the substantial changes it makes to the higher end of the spectrum (those in highest tax-brackets). Actually, that’s kind-of to be expected. Hey, how are we going to pay for the war(s) and all these bank bail-outs anyways?

On the other hand, if you’re flat-out broke, now you know where future benefits will be coming from (in part).

On the bright-side, perhaps this may further stimulate Real Estate activity amongst investors, looking to lock-in more profits and pay less homage to Uncle Sam. Can’t say I blame them!

Here’s a handy chart for reference:

**Capital Gains Taxation in the United States from 2003 forward** ->
2003 – 2010					2011 -
	2003 – 2007		2008 – 2010		2011 -
Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate
10%	10%	5%	10%	0%	15%	15%	10%
15%	15%	5%	15%	0%	15%	15%	10%
25%	25%	15%	25%	15%	28%	28%	20%
28%	28%	15%	28%	15%	31%	31%	20%
33%	33%	15%	33%	15%	36%	36%	20%
35%	35%	15%	35%	15%	39.6%	39.6%	20%

Thank you Wikipedia

Federal Tax Credit Expiring Soon!

Time to get your documents in order.

It would be a total shame to meet all the requirements and be eligible for the $8,000.00 Federal Tax Credit for First-Time Home buyers, and then fail to file the required documents.

Here are the requirements, as per the Internal Revenue Service website:

IRS First-Time Homebuyer Credit Documentation Requirements

Tax time is just around the corner and if you became a First-Time Homebuyer in 2009, you’re definitely looking forward to the First-Time Homebuyer Credit. However, are you confused about the documents required to claim the credit? The IRS has put together five tips to help clarify the documentation requirements.

Settlement Statement: Purchasers of conventional homes must include a copy of the Form HUD-1 or other executed Settlement Statement.
Properly Executed Settle Statement: A properly executed settlement statement shows all parties’ names and signatures, property address, sales price and date of purchase. However, settlement statements, including the Form HUD-1 can vary from one location to another and may not include the signatures of both the buyer and seller. In areas where signatures are not required on the settlement document, the IRS encourages buyers to sign the settlement statement when they file their tax return – even in cases where the settlement form does not include a signature line.
Retail Sales Contract: Purchasers of mobile homes who are unable to get a settlement must attach a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
Certificate of Occupancy: For a newly constructed home, where a settlement statement is not available, attached a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Long-Time Residents: If you are a long-time resident claiming the credit, the IRS recommends that you also attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.