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5 Home owner Tips to Avoid Being Scammed

March 24th, 2010 3:17 PM

5 Tips to Avoid Being Scammed

Don't pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.
Don't ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
Don't transfer title or sell your house to a "foreclosure rescuer." Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.
Don't pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.

Posted by Vanik and Selina on March 24th, 2010 3:17 PMPost a Comment (0)

Text of H.R. 3648 [110th]: Mortgage Forgiveness Debt Relief Act of 2007

March 25th, 2010 11:10 AM

Dec 19, 2007 - Enrolled Bill. This is the final text of the bill or resolution as approved by both the Senate and House. This is the latest version of the bill currently available on GovTrack.

H.R.3648

One Hundred Tenth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Thursday,

the fourth day of January, two thousand and seven

An Act

To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Mortgage Forgiveness Debt Relief Act of 2007'.

SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE EXCLUDED FROM GROSS INCOME.

(a) In General- Paragraph (1) of section 108(a) of the Internal Revenue Code of 1986 is amended by striking `or' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting `, or', and by inserting after subparagraph (D) the following new subparagraph:

(E) the indebtedness discharged is qualified principal residence indebtedness which is discharged before January 1, 2010.'.

(b) Special Rules Relating to Qualified Principal Residence Indebtedness- Section 108 of such Code is amended by adding at the end the following new subsection:

(h) Special Rules Relating to Qualified Principal Residence Indebtedness-

(1) BASIS REDUCTION- The amount excluded from gross income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the principal residence of the taxpayer.

(2) QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS- For purposes of this section, the term `qualified principal residence indebtedness' means acquisition indebtedness (within the meaning of section 163(h)(3)(B), applied by substituting `$2,000,000 ($1,000,000' for `$1,000,000 ($500,000' in clause (ii) thereof) with respect to the principal residence of the taxpayer.

(3) EXCEPTION FOR CERTAIN DISCHARGES NOT RELATED TO TAXPAYER'S FINANCIAL CONDITION- Subsection (a)(1)(E) shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer.

(4) ORDERING RULE- If any loan is discharged, in whole or in part, and only a portion of such loan is qualified principal residence indebtedness, subsection (a)(1)(E) shall apply only to so much of the amount discharged as exceeds the amount of the loan (as determined immediately before such discharge) which is not qualified principal residence indebtedness.

(5) PRINCIPAL RESIDENCE- For purposes of this subsection, the term `principal residence' has the same meaning as when used in section 121.'.

(1) Subparagraph (A) of section 108(a)(2) of such Code is amended by striking `and (D)' and inserting `(D), and (E)'.

(2) Paragraph (2) of section 108(a) of such Code is amended by adding at the end the following new subparagraph:

(C) PRINCIPAL RESIDENCE EXCLUSION TAKES PRECEDENCE OVER INSOLVENCY EXCLUSION UNLESS ELECTED OTHERWISE- Paragraph (1)(B) shall not apply to a discharge to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).'.

(d) Effective Date- The amendments made by this section shall apply to discharges of indebtedness on or after January 1, 2007.

SEC. 3. EXTENSION OF TREATMENT OF MORTGAGE INSURANCE PREMIUMS AS INTEREST.

(a) In General- Subclause (I) of section 163(h)(3)(E)(iv) of the Internal Revenue Code of 1986 (relating to termination) is amended by striking `December 31, 2007' and inserting `December 31, 2010'.

(b) Effective Date- The amendment made by this section shall apply to amounts paid or accrued after December 31, 2007.

SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE HOUSING CORPORATION.

(a) In General- Subparagraph (D) of section 216(b)(1) of the Internal Revenue Code of 1986 (defining cooperative housing corporation) is amended to read as follows:

(D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in subsection (a) are paid or incurred:

(i) 80 percent or more of the corporation's gross income for such taxable year is derived from tenant-stockholders.

(ii) At all times during such taxable year, 80 percent or more of the total square footage of the corporation's property is used or available for use by the tenant-stockholders for residential purposes or purposes ancillary to such residential use.

(iii) 90 percent or more of the expenditures of the corporation paid or incurred during such taxable year are paid or incurred for the acquisition, construction, management, maintenance, or care of the corporation's property for the benefit of the tenant-stockholders.'.

(b) Effective Date- The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 5. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.

(a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:

SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.

(a) In General- In the case of any member of a qualified volunteer emergency response organization, gross income shall not include--

(1) any qualified State and local tax benefit, and

(2) any qualified payment.

(b) Denial of Double Benefits- In the case of any member of a qualified volunteer emergency response organization--

(1) the deduction under 164 shall be determined with regard to any qualified State and local tax benefit, and

(2) expenses paid or incurred by the taxpayer in connection with the performance of services as such a member shall be taken into account under section 170 only to the extent such expenses exceed the amount of any qualified payment excluded from gross income under subsection (a).

(1) QUALIFIED STATE AND LOCAL TAX BENEFIT- The term `qualified state and local tax benefit' means any reduction or rebate of a tax described in paragraph (1), (2), or (3) of section 164(a) provided by a State or political division thereof on account of services performed as a member of a qualified volunteer emergency response organization.

(2) QUALIFIED PAYMENT-

(A) IN GENERAL- The term `qualified payment' means any payment (whether reimbursement or otherwise) provided by a State or political division thereof on account of the performance of services as a member of a qualified volunteer emergency response organization.

(B) APPLICABLE DOLLAR LIMITATION- The amount determined under subparagraph (A) for any taxable year shall not exceed $30 multiplied by the number of months during such year that the taxpayer performs such services.

(3) QUALIFIED VOLUNTEER EMERGENCY RESPONSE ORGANIZATION- The term `qualified volunteer emergency response organization' means any volunteer organization--

(A) which is organized and operated to provide firefighting or emergency medical services for persons in the State or political subdivision, as the case may be, and

(B) which is required (by written agreement) by the State or political subdivision to furnish firefighting or emergency medical services in such State or political subdivision.

(d) Termination- This section shall not apply with respect to taxable years beginning after December 31, 2010.'.

(b) Clerical Amendment- The table of sections for such part is amended by inserting after the item relating to section 139A the following new item:

Sec. 139B. Benefits provided to volunteer firefighters and emergency medical responders.'.

SEC. 6. CLARIFICATION OF STUDENT HOUSING ELIGIBLE FOR LOW-INCOME HOUSING CREDIT.

(a) In General- Subclause (I) of section 42(i)(3)(D)(ii) of the Internal Revenue Code of 1986 (relating to certain students not to disqualify unit) is amended to read as follows:

(I) single parents and their children and such parents are not dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of another individual and such children are not dependents (as so defined) of another individual other than a parent of such children, or.'.

(b) Effective Date- The amendment made by this section shall apply to--

(1) housing credit amounts allocated before, on, or after the date of the enactment of this Act, and

(2) buildings placed in service before, on, or after such date to the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof.

SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL GAINS EXCLUSION TO CERTAIN POST-MARRIAGE SALES OF PRINCIPAL RESIDENCES BY SURVIVING SPOUSES.

(a) Sale Within 2 Years of Spouse's Death- Section 121(b) of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph:

(4) SPECIAL RULE FOR CERTAIN SALES BY SURVIVING SPOUSES- In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting `$500,000' for `$250,000' if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.'.

(b) Effective Date- The amendment made by this section shall apply to sales or exchanges after December 31, 2007.

SEC. 8. MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS; LIMITATION ON DISCLOSURE.

(a) Extension of Time Limitation- Section 6698(a) of the Internal Revenue Code of 1986 (relating to failure to file partnership returns) is amended by striking `5 months' and inserting `12 months'.

(b) Increase in Penalty Amount- Paragraph (1) of section 6698(b) of such Code is amended by striking `$50' and inserting `$85'.

(c) Limitation on Disclosure of Taxpayer Returns to Partners, S Corporation Shareholders, Trust Beneficiaries, and Estate Beneficiaries-

(1) IN GENERAL- Section 6103(e) of such Code (relating to disclosure to persons having material interest) is amended by adding at the end the following new paragraph:

(10) LIMITATION ON CERTAIN DISCLOSURES UNDER THIS SUBSECTION- In the case of an inspection or disclosure under this subsection relating to the return of a partnership, S corporation, trust, or an estate, the information inspected or disclosed shall not include any supporting schedule, attachment, or list which includes the taxpayer identity information of a person other than the entity making the return or the person conducting the inspection or to whom the disclosure is made.'.

(2) EFFECTIVE DATE- The amendment made by this subsection shall take effect on the date of the enactment of this Act.

(d) Effective Date- The amendments made by subsections (a) and (b) shall apply to returns required to be filed after the date of the enactment of this Act.

SEC. 9. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS.

(a) In General- Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 (relating to assessable penalties) is amended by adding at the end the following new section:

SEC. 6699. FAILURE TO FILE S CORPORATION RETURN.

(a) General Rule- In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year--

(1) fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or

(2) files a return which fails to show the information required under section 6037,

such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.

(b) Amount Per Month- For purposes of subsection (a), the amount determined under this subsection for any month is the product of--

(1) $85, multiplied by

(2) the number of persons who were shareholders in the S corporation during any part of the taxable year.

(d) Deficiency Procedures Not To Apply- Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).'.

(b) Clerical Amendment- The table of sections for part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item:

Sec. 6699. Failure to file S corporation return.'.

(c) Effective Date- The amendments made by this section shall apply to returns required to be filed after the date of the enactment of this Act.

SEC. 10. MODIFICATION OF REQUIRED INSTALLMENT OF CORPORATE ESTIMATED TAXES WITH RESPECT TO CERTAIN DATES.

The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 1.50 percentage points.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

Posted by Vanik and Selina on March 25th, 2010 11:10 AMPost a Comment (0)

New $10,000 California Tax Credit Beginning May 1, 2010

March 24th, 2010 3:14 PM

BILL NUMBER: AB 183 ENROLLED
BILL TEXT

PASSED THE SENATE MARCH 22, 2010
PASSED THE ASSEMBLY MARCH 22, 2010
AMENDED IN SENATE MARCH 18, 2010
AMENDED IN SENATE SEPTEMBER 4, 2009

INTRODUCED BY   Assembly Member Caballero
   (Principal coauthor: Senator Ashburn)

                        FEBRUARY 2, 2009

   An act to add and repeal Section 17059.1 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.

LEGISLATIVE COUNSEL'S DIGEST

   AB 183, Caballero. Income tax credit: qualified principal
residence.
   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law, including a credit against those taxes in
an amount equal to the lesser of 5% of the purchase price of a
qualified principal residence, as defined, or $10,000, for purchases
made between March 1, 2009, and before March 1, 2010, subject to
specified restrictions.
   This bill would authorize a credit against those taxes in an
amount equal to the lesser of 5% of the purchase price of a qualified
principal residence, as defined, or $10,000, for purchases made
between May 1, 2010, and on or before December 31, 2010, or on or
after December 31, 2010, and before August 1, 2011, subject to
specified restrictions, including the submission of a certification
to the Franchise Tax Board by either the taxpayer or seller, made
under the penalty of perjury, that the residence has either never
been occupied or that the taxpayer is a first-time home buyer.
   This bill would limit the total amount of credits to $200,000,000
and would require that the aggregate limitation of $100,000,000 in
credits for the purchase of qualified principal residences that have
never been occupied be reduced by 70% of the credit amount allocated
under each certification by the Franchise Tax Board, and would
require that the aggregate limitation of $100,000,000 in credits for
the purchase of a qualified principal residence by first-time home
buyers be reduced by 57% of the credit amount allocated under each
certification by the Franchise Tax Board.
   By expanding the definition of an existing crime, this bill
imposes a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   This bill would take effect immediately as a tax levy.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 17059.1 is added to the Revenue and Taxation
Code, to read:
   17059.1. (a) (1) In the case of any taxpayer who purchases a
qualified principal residence on and after May 1, 2010, and on or
before December 31, 2010, or any taxpayer who purchases a qualified
principal residence on and after December 31, 2010, and before August
1, 2011, pursuant to an enforceable contract executed on or before
December 31, 2010, there shall be allowed as a credit against the
"net tax," as defined in Section 17039, an amount equal to the lesser
of 5 percent of the purchase price of the qualified principal
residence or ten thousand dollars ($10,000).
   (2) The amount of any credit allowed under paragraph (1) shall be
applied in equal amounts over the three successive taxable years
beginning with the taxable year in which the purchase of the
qualified principal residence is made.
   (3) The credit under this section shall be allowed for the
purchase of only one qualified principal residence with respect to
any taxpayer.
   (4) A qualified principal residence is purchased on the date on
which escrow closes with respect to the purchase of the qualified
principal residence.
   (b) For purposes of this section:
   (1) "Qualified principal residence" means a single-family
residence, whether detached or attached, that is purchased to be the
principal residence of the taxpayer, is eligible for the homeowner's
exemption under Section 218, and has either never been occupied or is
purchased by a first-time home buyer.
   (2) "First-time home buyer" means any individual, or individual's
spouse, who had no present ownership interest in a principal
residence during the preceding three-year period ending on the date
of the purchase of the qualified principal residence.
   (c) (1) (A) A taxpayer may, but is not required to, reserve a
credit prior to close of escrow for the purchase of a qualified
principal residence that has never been occupied. To reserve a
credit, the taxpayer and seller shall jointly sign and submit to the
Franchise Tax Board a certification that they have entered into an
enforceable contract on or after May 1, 2010, and on or before
December 31, 2010. Upon receipt of the joint certification, the
Franchise Tax Board shall notify the taxpayer that the board has
reserved the credit for the taxpayer, pending receipt, within two
weeks after the close of escrow, of the information required under
paragraph (2) for a qualified principal residence that has never been
occupied.
   (B) The reservation of a credit shall be canceled if a taxpayer
does not provide either the information required under paragraph (2)
or a notification of cancellation before August 16, 2011.
   (2) No credit shall be allowed under this section unless the
taxpayer submits to the Franchise Tax Board, within two weeks after
the date of the purchase of the qualified principal residence, a copy
of the properly executed settlement statement and either one of the
following:
   (A) If the qualified principal residence has never been occupied,
a certification by the seller, made under penalty of perjury, that
the residence has never been previously occupied.
   (B) If the qualified principal residence is purchased by a
taxpayer who is a first-time home buyer, a certification from the
taxpayer, made under penalty of perjury, that he or she is a
first-time home buyer.
   (d) If the taxpayer does not occupy the qualified principal
residence as his or her principal residence for at least two years
immediately following the purchase, any remaining unapplied credit
shall be canceled and any previously applied credit shall be
recaptured, and the taxpayer shall be liable for any increase in tax
attributable to the recapture of any credit previously allowed under
this section.
   (e) (1) In the case of two married taxpayers filing separately,
the credit allowed under subdivision (a) shall be equally apportioned
between the two taxpayers.
   (2) If two or more taxpayers who are not married purchase a
qualified principal residence, the amount of the credit allowed under
subdivision (a) shall be allocated among the taxpayers in the same
manner as each taxpayer's percentage of ownership, except that the
total amount of the credits allowed to all of these taxpayers shall
not exceed an amount equal to the lesser of 5 percent of the purchase
price of the qualified principal residence or ten thousand dollars
($10,000).
   (f) (1) The total amount of credit that may be allocated pursuant
to this section shall not exceed one hundred million dollars
($100,000,000) for the purchase of qualified principal residences
that have never been occupied and one hundred million dollars
($100,000,000) for the purchase of qualified principal residences by
first-time home buyers.
   (A) For each certification or reservation received from a taxpayer
for the purchase of a qualified principal residence that has never
been occupied, the total amount of credit available for allocation
shall be reduced by an amount equal to 70 percent of the amount of
the credit for the purchase of a qualified principal residence that
has never been occupied.
   (B) For each certification received from a taxpayer for the
purchase of a qualified principal residence by a first-time home
buyer, the total amount of credit available for allocation shall be
reduced by an amount equal to 57 percent of the amount of the credit
for the purchase of a qualified principal residence by a first-time
home buyer.
   (2) Once the credits allocated for qualified principal residences
that have never been occupied exceed the limit established in
subparagraph (A) of paragraph (1), the Franchise Tax Board shall
establish a wait list for subsequently received certifications or
reservations, with an order of priority based on the date
certification or reservation was received by the Franchise Tax Board.
The Franchise Tax Board shall notify taxpayers on the wait list no
later than December 31, 2011, as to whether they have been allocated
a credit and the amount allocated.
   (3) In the case where a taxpayer is both a first-time home buyer,
as described in paragraph (2) of subdivision (b), and the purchaser
of a qualified principal residence that has never been occupied, the
Franchise Tax Board shall allocate that taxpayer their credit amount
from the one hundred million dollars ($100,000,000) for qualified
principal residences that have never been occupied.
   (g) (1) Upon receipt of the information described in subdivision
(c), the Franchise Tax Board shall allocate the credit to the
taxpayer on a first-come-first-served basis.
   (2) (A) Except as provided in subparagraph (B), the taxpayer shall
claim the credit on a timely filed original return.
   (B) Taxpayers on the wait list, as described in paragraph (2) of
subdivision (f), that are allocated a credit for a qualified
principal residence that was purchased in the 2010 taxable year may
claim the credit on an amended income tax return for that taxable
year.
   (3) The date the information described in subdivision (c) is
received shall be determined by the Franchise Tax Board.
   (4) (A) The determinations of the Franchise Tax Board with respect
to the date the information described in subdivision (c) is
received, the allocation and reservation of credit, and whether a
return has been timely filed for purposes of this subdivision, may
not be reviewed in any administrative or judicial proceeding.
   (B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in subdivision (f), shall be treated as a mathematical
error appearing on the return. Any amount of tax resulting from that
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
   (h) The Franchise Tax Board may prescribe rules, guidelines, or
procedures necessary or appropriate to carry out the purposes of this
section, including any guidelines regarding the allocation of the
credit allowed under this section. Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code does not apply to any rule, guideline, or procedure prescribed
by the Franchise Tax Board pursuant to this section.
   (i) The credit allowed by this section is not a business credit
within the meaning of Section 17039.2.
   (j) No credit shall be allowed under this section if any of the
following apply:
   (1) The taxpayer was allowed a credit under Section 17059.
   (2) The taxpayer is not 18 years of age or older as of the date of
purchase. A taxpayer who is married at the date of purchase shall be
considered to be 18 years of age if the spouse of the taxpayer is 18
years of age or older on the date of purchase.
   (3) The taxpayer or the taxpayer's spouse, if the taxpayer is
married, is related to the seller within the meaning of Section 267
of the Internal Revenue Code, related to losses, expenses, and
interest with respect to transactions between related taxpayers.
   (4) The taxpayer qualifies as a dependent, as defined in Section
17056, of any other taxpayer for the taxable year of the purchase.
   (k) This section shall remain in effect only until December 1,
2014, and as of that date is repealed.
SEC. 2.   No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

Posted by Vanik and Selina on March 24th, 2010 3:14 PMPost a Comment (0)