Cliff's Notes…on Real Estate

Redwood City, Ca: Governor Schwarzenegger on Monday signed SB 401 (Wolk) into law providing distressed homeowners with state tax exemption on debt forgiven in a short sale, foreclosure, or loan modification. Effective immediately, this bill generally aligns California’s tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a qualified principal residence, borrowers now will be exempt both from federal and state income tax consequences. The tax exemptions apply, with certain restrictions, to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

More details:

“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board‘s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:

. Homebuyer Tax Credit Chart 2010.
. Internal Data Exchange (IDX).

Tags: Cliff Keith and Team, Foreclosure, government, Redwood City, Short Sale, Taxes

“Big Government, Low Taxes”

Our nations capital has forgotten to they work for “We the People”. Our founding fathers diligently worked to create a government, which prevented our new government from “European-style privilege and bureaucracy that they had escaped.” They knew they could expect corruption in government and they felt serving the public interest was more of a politician’s role.

George Washington, John Adam, Thomas Jefferson and Ben Franklin believed being a politician was a civic obligation and NOT a full time occupation. Today’s politicians don’t feel or act that way. They are influenced by special interests, and lobbyists, which may or may not have the nations best interests at heart. Including their, personal ethics and public morality. This has caused America to lose good leadership. We “face a serious leadership deficit-one that was not there at the birth of our republic.”

“We have lost our way in developing the ideas at the root of American political thinking in the early days—limited government. Instead today we have created a big government. One who runs up a huge deficit budgets, year after year, to the point where “We the People” will not be able to pay off this enormous commitment we are incurring within our own lifetime. Our children and grandchildren will have to take on our burden along with their own. Their standard of living will be decreased and this will be the first time in American history one generation passed on undo hardships.

In the 1990’s in America statutory budget controls were enacted to side skirt this trend. It was called the PAYGO RULES: which put caps on discretionary spending increases, and paid offs any new spending or tax cuts within 10 years. PAYGO RULES expired in 2002. The most important provisions of these rules, IMHO, were that they gave the basis for our Congress the opportunity to say NO to demands by special interest groups and their big contributor constituencies. Maybe PAYGO RULES need a rebirth?

Your comments are encourage. More to follow.

Tags: cliff keith, cliffnotesonrealestate, Comeback America, David M. Walker, government, national debt, Real Estate, san mateo county, Taxes, US economy

10 cheap ways:

1. Paint the façade of your home including your front door.
2. Trim the plants and plant seasonal flowers.
3. Paint the inside of your home with neutral colors
4. Don’t forget all the flooring, replace, repair, or buff out.
5. Make major repairs, roof, pest report, property inspection recommendations
6. Buy a HPP (Home Protection Plan) so all systems are covered when you move
7. Make energy-efficient improvements and possibly get a tax credit
8. Replace light fixtures with modern ones and low energy bulbs
9. Buy a new stove for the kitchen
10. Replace the bathrooms: fixtures, shower heads, toilet seat, towels, and hand cloths

It should go without saying the homeowner should to a super through cleaning job and get rid of all dust, dirt, cobwebs, mold and any smells from pungent cooking odors, pet smells, or mildew.

There is nothing like a bright, fresh open air feeling to bring the buyers calling. Only caveat is to do these before you allow a prospective buyer in your lovely home.

For other informative pamphlets click here now

Tags: 10 cheap ways to boost your selling price, agent, cliff keith, Cliff Keith and Team, cliffnotesonrealestate.com, home for sale, homes, houses, re/max, Real Estate, realtor, Redwood City, Redwood Shores, residential home, san mateo county, Taxes, US economy

part 2: It is all about how our government collects money, mainly through taxation, and how they spend our taxes in governmental operations, programs and benefits. The decisions on how much taxing and how much spending is called fiscal policy.