Tag: KY

Understand Your Credit Score To Help Avoid Foreclosure : Fannie Mae

Understand Your Credit Score To Help Avoid Foreclosure : Fannie Mae.

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Seller Tax Issues and the Sale of a Principal Residence for Kentucky Home Buyers and Homeowners

Seller Tax Issues and the Sale of a Principal Residence for Kentucky Home Buyers and Homeowners
The following information will assist each Seller of a principal residence with the tax issues they should discuss with a qualified tax preparer prior to filing a 2012 tax return.

 

   I.              General Summary

The sale of real or personal property may generate federal and/or state tax liabilities for a seller. Generally, the seller will need to compare the “basis” of the property in light of the sales price in order to determine whether there is a potential “capital gain” or “capital loss” under the tax code. Fortunately, the IRS allows the great majority of homeowners to treat the sale of a principal residence as a “tax-free” event, regardless of whether any portion of the proceeds from the sale are reinvested into a new home.

II.            Reporting Requirements

Each seller should be asked by the closer to complete an IRS Form 1099 Certification, which is an effort by the IRS to receive notice that a seller may have a potential tax liability or information to report in relation to the sale. The questions asked on this form relate only to whether the title agency is required to file an electronic “IRS Form 1099-S”, not whether tax is owed for the sale.

III.           FORM 1099 Certification

If any of the following questions are not “true” for each seller, the title agency will file an electronic Form 1099-S and each seller will need to seek competent tax advice prior to filing their tax return. The questions can be summarized, as follows:

Q: The property served as the seller(s) principal residence for a period of 2 out of the last 5 years? ( T / F )
Q: The sellers have not sold another principal residence in the past 2 years? ( T / F )
Q: The sellers did not use the property for “business” or “rental” purposes? ( T / F )
Q: The sales price was (i) $250,000 or less for an unmarried owner, or (ii) $500,000 or less for a married couple who will file a joint return? ( T \ F )

Principal residence” will be determined based upon the “ownership & use test”, which relates to factors such as (a) the amount of time spent living in the home, (b) employment location, (c) the address listed on bills, tax returns, driver’s license, voter registration, and (d) the location of banks, recreation clubs, and religious organizations frequented by the owners.

Special Considerations: There are many circumstances [examples include work-related moves, death of a spouse, health issues for you or a family member, divorce, extended duty military service, receipt of a “first-time” homebuyer credit, ownership of multiple tracts of land, natural disasters, and many other “unforeseen circumstances”] that may require additional tax guidance in order to identify, minimize or exclude the tax liabilities associated from the sale of a principal residence.

IV.           FORM 1099-S Contents

If each seller fails to certify all statements in Section III as “true”, the title agency will file an electronic Form 1099-S at the end of the tax year, which includes each seller’s (a) name and mailing address, (b) description of the property sold, (c) closing date, and (d) gross proceeds (sales price). Each seller must provide written instructions if the sales price is to be allocated or “split” between sellers.

 

If you would like a handout of this summary to provide to your customers, feel free to print out this flyer.

Disclaimer : This email is only intended to provide general information regarding tax issues as they pertain to the sale of a personal residence, does not create an attorney/client relationship between the sender and recipient, and should not be relied upon as specific legal or tax accounting advice. If you need legal assistance with respect to a specific transaction, please contact us to discuss the specific facts. 

Here are the cities in Kentucky that will no longer be eligible for RHS or USDA Rural Development mortgage loans effective 10/1/2012:

Here are the cities in Kentucky that will no longer be eligible for RHS or USDA Rural Development mortgage loans:

More Info on Kentucky RHS – Support Rural Definition Amendment for Kentucky  USDA Programs – Please read carefully and ACT NOW!!!
On July 31, 2012 Congress passed a 6-month Continuing Resolution (CR) to fund the government through March 31, 2013, avoiding a messy fight over the FY13 Appropriatios bills.  At this time, the Continuing Resolution (CR) is our best opportunity to enact a solution to USDA’s “rural” definition issue before the October 1, 2012 deadline for RHS.
PLEASE CALL OR EMAIL YOUR REPRESENTATIVES TODAY AND EVERY DAY and ask them to sign on to Rep. Fortenberry’s letter to Appropriations Chairman Hal Rogers, urging the Committee to address the “rural” definition issue in the Continuing Resolution (CR).
The CR is our best opportunity to address these issues before the October 1st deadline.  If the House does not enact a solution to the “rural” definition issue, USDA will move forward with the below changes on October 1st.  The Senate already has a provision in their appropriations bill.  Now, we need the House to act. When you call or email your Representative make sure they know that without this CR, the October 1st changes will serve a massive blow to affordable housing in rural communities.
Please, don’t think that someone else will make the calls or send the emails.  It is up to YOU! Also contact all the Realtors and Builders that you know because it affects them too!  Ask them to call their Representatives as well. 

Here are the cities in Kentucky that will no longer be eligible for RHS mortgage loans:

Bardstown, city 

Burlington, city

Elizabethtown, city

Gerogetown, city

Independence, city

Nicholasville, city

Shelbyville, city

Shepherdsville, city

IMPPORTANT – READ CAREFULLY!
Representative Hal Rogers is the Chairman of the Agriculture Appropriations Committee.  The Farm Bill is currently in the House of Representatives Agriculture Appropriations Committee for review.  Hal Rogers is in favor of the changes we are requesting.  Even if he is not your Representative contact him anyway so that he can provide more fuel to the committee as to the importance of this bill – he’s on our side. CLICK HERE TO CONTACT HAL ROGERS.
Click here if you would like tips on how to communicate with your legislato

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