Dear friends of RC Jones & Associates
The "first-time homebuyer credit" isn't just for first-time homebuyers anymore. Thanks to a new tax law change, longtime homeowners may also qualify.
Under the new "Worker, Homeownership and Business Assistance Act of 2009," you must complete the purchase of the home before May 1, 2010. If you secure a binding contract before May 1, you actually have until June 30, 2010 to finalize the sale. Best of all, you don't have to wait until you file your 2010 tax return to reap the rewards. You can claim the credit on your 2009 return -- even if you buy the home in 2010. Taxpayers who claim the first-time homebuyer credit on their 2009 returns will not be able to file electronically.
The new law includes the following changes effective as of Nov. 6, 2009 (the date of enactment).
• The deadline for the credit is extended from Dec. 1, 2009 to May 1, 2010. No further extension is expected.
• The credit is available to more taxpayers. Previously, it was limited to "first-time homebuyers" who did not own a principal residence for three years prior to purchasing a home. For purchases after Nov. 6, 2009, you may qualify for a maximum $6,500 credit if you've owned and used a home as your principal residence for any five consecutive years during the last eight years. The replacement home doesn't have to cost more than the old one.
• The phase-out ranges are increased. The new phase-out ranges are between $125,000 and $145,000 of MAGI for unmarried filers, and $225,000 and $245,000 for joint filers.
• The price of the home is capped at $800,000 for all purchases after Nov. 6, 2009. No credit is allowed for homes priced above this threshold.
• The credit isn't available for a home purchased from your spouse or your spouse's relatives. This extends the rule denying the credit for purchases from your own lineal ancestors or descendants.
• To curb abuses, homebuyers must provide proof of purchase (i.e., an HUD-1form). The homebuyer (or spouse) must be at least 18 years and can't be claimed by someone else as a dependent.
The revamped homebuyer credit is available to a much wider group of taxpayers. To determine whether you or another family member is eligible, call our office at (816) 792-9966.
Very truly yours,
Robert C. Jones
www.rcjonesinc.com
Monday, December 21, 2009
DOUBLE TAX BENEFIT FOR NOL’S
Dear friends of RC Jones & Associates
The new "Worker, Homeownership and Business Assistance Act of 2009" extends and expands the tax break for net operating losses (NOLs) created by the 2009 economic stimulus law. What's more, some business owners may be able to realize a double tax benefit.
Here's a quick recap: A business can normally carry back an NOL for two years and then forward for up to 20 years until the loss is exhausted. However, the 2009 economic stimulus law allowed a qualified small business to carry back NOLs for up to five years (either three, four or five years). This opportunity was only available for NOLs in tax years beginning or ending in 2008.
For this purpose, a "small business" was defined as a business with an average of no more than $15 million in gross receipts over the three-year period ending with the tax year of the NOL.
Other businesses could still carry back losses for two up to two years. The new law sweetens the deal in two ways.
• The election to carry back losses for up to five years is extended to businesses of all sizes, but the carry-back to the fifth year is limited to 50% of the available taxable income for the year.
• The election to carry back losses for up to five years is extended to NOLs incurred in either 2008 or 2009, but generally not both tax years.
However, if an eligible small business elected to carry back a 2008 loss under the prior rules, it can make the election for an additional year. Therefore, your small business may benefit from extended carry-backs for NOLs in 2008 and 2009.
For more details about this new tax break, contact our office at (816) 792-9966. One of our expert staff members will be glad to assist you.
Very truly yours,
Robert C. Jones
www.rcjonesinc.com
The new "Worker, Homeownership and Business Assistance Act of 2009" extends and expands the tax break for net operating losses (NOLs) created by the 2009 economic stimulus law. What's more, some business owners may be able to realize a double tax benefit.
Here's a quick recap: A business can normally carry back an NOL for two years and then forward for up to 20 years until the loss is exhausted. However, the 2009 economic stimulus law allowed a qualified small business to carry back NOLs for up to five years (either three, four or five years). This opportunity was only available for NOLs in tax years beginning or ending in 2008.
For this purpose, a "small business" was defined as a business with an average of no more than $15 million in gross receipts over the three-year period ending with the tax year of the NOL.
Other businesses could still carry back losses for two up to two years. The new law sweetens the deal in two ways.
• The election to carry back losses for up to five years is extended to businesses of all sizes, but the carry-back to the fifth year is limited to 50% of the available taxable income for the year.
• The election to carry back losses for up to five years is extended to NOLs incurred in either 2008 or 2009, but generally not both tax years.
However, if an eligible small business elected to carry back a 2008 loss under the prior rules, it can make the election for an additional year. Therefore, your small business may benefit from extended carry-backs for NOLs in 2008 and 2009.
For more details about this new tax break, contact our office at (816) 792-9966. One of our expert staff members will be glad to assist you.
Very truly yours,
Robert C. Jones
www.rcjonesinc.com
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