posted: Apr. 3, 2008 @ 6:51a 
No details given in this article, but could be profitable for those buying foreclosures.
$7000 tax credit for buying a foreclosure Archived From: Finance |
No details given in this article, but could be profitable for those buying foreclosures.
This thread is to both argue the wisdom of this policy, and how to exploit this policy.
But please, not to discuss the politics of the policy or call eachother names.
I heard about this last night... the one caveat was that you had to actually live in the house so this would be a one-per-person deal.
I wonder though... could this lead to some lenders offering a program where they make loans to marginal buyers in exchange for a 'small but useful' portion of the tax credit the person receives?
SameNickname said:
I wonder though... could this lead to some lenders offering a program where they make loans to marginal buyers in exchange for a 'small but useful' portion of the tax credit the person receives?
Mortgage Lenders are as a whole, some of the most honest and well thoughtout economists of our time. I doubt they would do anything so unscrupulous which may eventually undermine our entire economy.
gotta love the US government. take money from us and give it to the poor, because they can't afford housing. on the other hand, now they want to take money from us to prop up housing prices because they are too low. how about taking money from the people that made the unstable market in the first place and leave us responsible people alone?
^i'm sorry. But did you miss the part where they are allowing the big corps to take losses in 2008 and 2009 and apply them to profits going back 4!!!!! FOUR!!! years.
the 7grand a house is a carrot that will just make foreclosures 7 grand more expansive. At the cost of millions/billions? of hand out to big buisness.
If you think this was just a money grab from the rich to the poor you need to open your eyes.
This was a shaft to every responsible person in the country, as it takes money from them, and gives it to the slackers, and the big business a big chunck of which will help the home builders who had record profits over 2 years ago, but record losses the past year. the smae companies that in their greedy helped create this mess.
Its just a total shaft to every responsble person... USA goverment to all.. If you are an idiot, or crook, or scam artist, we'll bail you out. You do things by the book "SUCKER"
micheal, can you at least read one post on FW, any forum, before posting your response? Even once? Did I say it was a grab from the rich to the poor? No. Not even close. I said we are spending tax payer money at one end because housing prices are too high, and spending at the other end because prices are too low. That is not rob the rich to pay the poor, it's rob the responsible to pay them both. Gosh, which is what you said. Amazing how reading before responding can make a difference.
huked un pfhonicz cun wurc fer ewe tooo.
This is a dumb question - but the $7k tax credit is $7k off of earned income, correct?
michal1980 said:^i'm sorry. But did you miss the part where they are allowing the big corps to take losses in 2008 and 2009 and apply them to profits going back 4!!!!! FOUR!!! years.
What annoys me about allowing homebuilders to apply losses to back profits is it only serves to encourage homebuilders to keep building new homes by making it profitable/less unprofitable to keep building them. And the last thing the housing market needs right now is more homes.
MadAnthony said:michal1980 said:^i'm sorry. But did you miss the part where they are allowing the big corps to take losses in 2008 and 2009 and apply them to profits going back 4!!!!! FOUR!!! years.
What annoys me about allowing homebuilders to apply losses to back profits is it only serves to encourage homebuilders to keep building new homes by making it profitable/less unprofitable to keep building them. And the last thing the housing market needs right now is more homes.
No, it doesn't encourage homebuilders to do that. A policy like this gives them cash, but doesn't require them to spend that cash on building a new home.
dcg9381 said:This is a dumb question - but the $7k tax credit is $7k off of earned income, correct?
Yes, but not only. It will probably be on page 2 of the 1040, which includes earned and unearned income.
However, to get back to the topic of the post; how can we at Fatwallet make this tax credit profitable to us? I'm thinking you could make an EASY, $6,000!!!
Step 1: Buy a foreclosed home for $7k on Dec 31st
Step 2: Sell home the next day on Jan 1st for $6k.
Step 3: On your 2008 and 2009 tax returns, claim the $7k tax credit
http://www.senate.gov/~finance/press/Bpress/2008press/prb040208.pdf
Edited by Moderator: Unnecessary name calling.
calvinandhobbes said:gotta love the US government. take money from us and give it to the poor, because they can't afford housing. on the other hand, now they want to take money from us to prop up housing prices because they are too low. how about taking money from the people that made the unstable market in the first place and leave us responsible people alone?
I totally agree. Why are we rewarding the owners of foreclosed properties?
This strange tax incentive increases buyers willingness to pay, so I would suspect that most of the value created will pass to the owner of the foreclosed property. Sure, the highest bidding buyer gets the $7k tax credit, but most likely he or she had to pay ~$7k in a higher sales price due to increased competition from the tax incentive.
calvinandhobbes said:gotta love the US government. take money from us and give it to the poor,
i'm sorry I took 'us' as rich. My reading must really be off.
The government will now pay you to buy a house in Detroit.... Plenty of 5k or less houses there.
dcg9381 said:This is a dumb question - but the $7k tax credit is $7k off of earned income, correct?
No. A tax credit is not a deduction. A low income family with has potential to get $13-14k tax refund while paying $0 in income taxes and using this program. It's like the earned income credit where the government pays you to be working poor.
calvinandhobbes said:gotta love the US government. take money from us and give it to the poor, because they can't afford housing. on the other hand, now they want to take money from us to prop up housing prices because they are too low. how about taking money from the people that made the unstable market in the first place and leave us responsible people alone?
They are morons. This won't "prop up housing prices". All this is going to do is cause problems for people who are trying to sell their home that are not in forclosure. Now they'll have to lower their price because the forclosed property will be cheaper because of the tax credit.
Stupid ass idea.
delzy said:dcg9381 said:This is a dumb question - but the $7k tax credit is $7k off of earned income, correct?
No. A tax credit is not a deduction. A low income family with has potential to get $13-14k tax refund while paying $0 in income taxes and using this program. It's like the earned income credit where the government pays you to be working poor.
Did you read?????
http://www.senate.gov/~finance/press/Bpress/2008press/prb040208.pdf
"Allow taxpayers purchasing as their principal residence homes upon which foreclosure has been filed pursuant to the laws of the state a $7,000 non-refundable tax credit claimed ratably over two tax years. The credit is available for purchases beginning date of enactment for one year."
So no, you're wrong. This is not refundable.
didnt someone say you have to live there?
This is certainly going to exclude all of the $5k Detroit crack houses from consideration - but a good deal!
camiolo said:delzy said:dcg9381 said:This is a dumb question - but the $7k tax credit is $7k off of earned income, correct?
No. A tax credit is not a deduction. A low income family with has potential to get $13-14k tax refund while paying $0 in income taxes and using this program. It's like the earned income credit where the government pays you to be working poor.
Did you read?????
http://www.senate.gov/~finance/press/Bpress/2008press/prb040208.pdf
"Allow taxpayers purchasing as their principal residence homes upon which foreclosure has been filed pursuant to the laws of the state a $7,000 non-refundable tax credit claimed ratably over two tax years. The credit is available for purchases beginning date of enactment for one year."
So no, you're wrong. This is not refundable.
No, I didn't read. Thanks for doing my homework.
delzy said:
No, I didn't read. Thanks for doing my homework.
You're quite welcome. That's what the spirit of this community is about; sharing our collective knowledge.
kamalktk said:The government will now pay you to buy a house in Detroit.... Plenty of 5k or less houses there.
A $7000 tax credit to someone in the highest bracket is still only $2450. There is no way you're going to buy a house for $2450 or less.
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