PMI deduction extended

As I mentioned in my last post, I am providing an update on some of the latest laws passed relating to home ownership.

Today the topic is PMI: private mortgage insurance. PMI is required as part of your monthly payment to the mortgagor when you did not put down 20% or more in the purchase of your home. The insurance is to cover the mortgagor---not yourself.

The good news is that Congress voted to extend the deductibility of PMI premiums until January 1, 2010. If your adjusted gross income is below $100,000, you are eligible for a full deduction; it is phased out after your adjusted gross income is above $110,000. You also had to purchase your home after 2006.

If you have any questions, it is best to talk to your tax expert. I know enough to tell you to talk to someone who knows all the details! I hope this information points you in the right direction. Good luck on your tax filing this year.....

Good news for "short sale" owners

At the end of the year, the President signed in new legislation....I have to admit with all the news is has been hard to figure out what has been written into law. I decided over the next few posts that I would share what I have learned in hopes it will help those who currently face the "short sale" prospect.

A "short sale" is the effort by a Realtor to sell someone's property who is facing foreclosure. Prior to the bank or mortgage company auctioning the property, the property is marketed, and the Realtor works with the mortgagor to accept less than what is owed on the property. This remedy is being used a lot nowadays because of the number of adjusting loans and the property values in Orlando not rising to allow for re-financing.

In many cases, the house ends up being sold for $25,000 to $50,000 less than what is owed. In the past, the amount that was forgiven by the bank in the "short sale," but a 1099 was filed, and the amount was attributed as "income."

Yes, it is hard to imagine, but if the loan cannot be paid, how did the government expect them to pay taxes on the forgiven amount? But I digress.

Law was inacted that eliminates the tax until January 1, 2010. The law is retroactive to January 1, 2007.

If you have any questions about short sales, or the options you can have with a mortgage company when you cannot continue to make the payments, please e-mail me at www.audreybutlerhomes.com or contact me at the numbers provided.

Tax information for new home owners

Are you a new home owner, and concerned how this is going to affect your taxes? The IRS has created an on-line publication called "Tax Information for First-Time Homeowners." Look for Publication 530.

Check it out: http://www.irs.gov/