>"I read that the tax credit is “refundable.” What does that mean? >The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income >tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the >refundable tax credit.
>For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax >withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the >taxpayer qualified for the $6,500 home buyer tax credit. As a result, the taxpayer would receive a check for $5,500 ($6,500 minus the $1,000 >owed)."
This is so cool! My wife and I just finished getting bids for repair of a HUD FHA 203k rehab house that we won at auction in mid September. It took us about 3 weeks longer than it would have to decide on a general contractor, because a family friend recommended someone who took a long time to get his bid in, and who ultimately said he could not do the work due to insurance issues. Then last week, I was contacted by a general contractor who said he had lots of experience with HUD homes, and the paperwork involved with FHA rehabs. I told him if he could inspect the property this week, and get us a bid by today (Saturday), I would consider his bid. Well, at first he acted very gung-ho about taking on the project, but ultimately, he just disappeared - he didn't make the appointment to look at the place, and the work that needed to be done. He never replied to the email I sent telling him all the details of the work that needed to be done. Ultimately, he cost me an extra week of wasted waiting.
However, because of the roughly 3 extra weeks of delay dealing with these people, I'm now going with the first place that gave me a bid for everything - a fairly large company that isn't going to play these games. Plus, the big bonus is that now we haven't closed on the place already, and it looks like we will be getting a check for ~$6k from the government!
We already get most of our taxes back due to the child tax credit, and having 3 young children. The ~$6k will allow us to have some improvements done that we didn't think we could afford.
Unless I'm misreading something, it seems like you'd be receiving the same amount of money regardless of the GC, except in the scenario you've described, you're spending more.
No - if we had filled out the paperwork 3 weeks ago, we likely would have closed on the loan by now. Closing date for the loan determines whether you can get the $$ or not. If we had closed a couple of days ago, there would have been no money for us.
IStillPickUpPennies said:>Wouldn't you have gotten the $6K anyway?
No - if we had filled out the paperwork 3 weeks ago, we likely would have closed on the loan by now. Closing date for the loan determines whether you can get the $$ or not. If we had closed a couple of days ago, there would have been no money for us.
You know you can quote someone elses post right? Instead of clicking on reply, click quote. Then it looks like this.
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