Written by Federal Title | 29 July 2010

Summer is a busy time for everyone, but particularly for military members and their families. Whether it’s moving to a new base or traveling to a duty station, members of the military have many obligations that could impact their tax situation. Here are 10 IRS tax tips military members should keep in mind this summer to help with filing a tax return next year.

Moving Expenses
If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household.

Combat Pay
If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all your military pay received for military service that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.

Extension of Deadlines
The time for taking care of certain tax matters can be postponed. The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.

Uniform Cost and Upkeep
If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms, but you must reduce your expenses by any allowance or reimbursement you receive.

Joint Returns
Generally, joint returns must be signed by both spouses. However, when one spouse may not be available due to military duty, a power of attorney may be used to file a joint return.

Travel to Reserve Duty
If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.

ROTC Students
Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.

Transitioning Back to Civilian Life
You may be able to deduct some costs you incur while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location, and you meet certain tests.

Tax Help
Most military installations offer free tax filing and preparation assistance during the filing season.

Tax Information
IRS Publication 3, Armed Forces’ Tax Guide, summarizes many important military-related tax topics. Publication 3 can be downloaded from IRS.gov or may be ordered by calling 1-800-TAX-FORM (800-829-3676).

Written by Federal Title | 29 July 2010

A daily dose of headlines for real estate agents, mortgage lenders and consumers.

Intervention helped avert 2nd depression  The New York Times: Economists argue without the Obama administration’s fiscal stimulus program, the nation’s GDP would be about 6.5% lower.	Is the real estate market turning around? Seeking Alpha: But here is probably the most significant statistic: home ownership rates have fallen to 66.9 from a high of 69.2% in 2004.
For housing outlook, look past tax credit to jobs Wall Street Journal: The future of home buying will rely less on real-estate fundamentals and more on how consumers view job prospects.	Home ownership falls to lowest level in 11 years CNN Money: Almost 86% of U.S. homes were occupied in the second quarter, with owner-occupied housing comprising 57.3% of all housing units.
Housing recovery about timing, location CNBC: Conditions are hardly uniform. Some cities, such as Washington, D.C. have better job markets, so they have suffered less or in some cases recovered more quickly.	Home prices increase in May Calculated Risk: Seasonal adjustment is probably being distorted by irregular factors. These distortions could include distressed sales and the various government programs.

Written by Federal Title | 28 July 2010

While the nation's housing market struggles amid a sudden downdraft that has once again battered sales, the Washington region appears relatively insulated and poised for a turnaround, the Washington Post reports.

Home-buying activity in the second quarter was well above where it was in the comparable period a year ago, and homes sold more quickly and at higher prices, according to a study compiled by the Delta Associates consulting firm and Metropolitan Regional Information Systems, the local multiple listing service.

"We feel quite comfortable in saying that the bottom has passed in this region," Sandy Paul, Delta's national research director, to the Post. "But if the national and global economies take a turn for the worse, all bets are off."

Written by Federal Title | 28 July 2010

The District of Columbia is currently in a very aggressive posture regarding collection of revenue from real property taxes and assessments, including vacant properties. Properties may be reclassified as “vacant” or “blighted” retroactively, resulting in enormous real property tax liabilities, as these properties are taxed at the rate of $10 per $100 of assessed value.

There has been a never-ending stream of legislation changing the laws regarding the tax rate for vacant property, as D.C. balances its need for cash against the outraged cries of property owners required to pay a truly exorbitant tax rate of $10 for every $100 of assessed value for certain vacant properties.

In the latest change to the vacant property tax laws, D.C. will go to four real property tax classifications, effective October 10, 2010:

• -Class 1: Occupied residential property and certain vacant land located in residential zones;

• -Class 2: All property which is not Class 1, 3 or 4; usually commercial property;

• -Class 3: Vacant property which is not “blighted”, taxed at $5/$100 of assessed value. Vacant building owners are exempt from paying the Class 3 property tax rate if the property is for sale or rent, subject to probate proceedings, under active construction or rehab or there is a pending application for an administrative predevelopment proceeding.

• -Class 4: Blighted buildings, deemed to be unsafe or unsanitary by DCRA, and taxed at $10/$100 of assessed value.

Written by Federal Title | 28 July 2010

If you're familiar with the Homestead Exemption, you're likely aware that effective immediately, the Office of the Recorder of Deeds (ROD) and the OTR will only accept the June 2010 updated Homestead Application. For your convenience, you may download the updated Homestead Application form from our website.

Note that, with the new application, supporting documents are required at the time of submission: DC driver’s license, car registration and voter registration showing the address of the new DC residence, and DC income tax return (first and signature page only)or D-4 Withholding Allowance Certificate. OTR no longer accepts “pending” responses; the application will be returned to the applicant.  
If you undertake to file Homestead Applications for your purchaser clients, you must be aware of the new rules.

Here Thanh-Thuy "Twee" Nguyen, manager of the Homestead Unit, answers questions regarding this new policy:

 

Q.  Will the previous (2009) form still be allowed, or only the June 2010 form? As of what date?

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TN: We are still accepting the old applications at present, because the public announcement has not been sent out on the new applications. We anticipate October 1, 2010 to begin sending back applications that are not updated and without supporting documents.

 

Q. When will your new policy of requiring supportive documentation (voter registration, driver’s license, DC tax return) with the application go into effect?

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TN: It has been put into affect since April 1, 2010. We just sent back 1700 applications without supporting documents.

 

Q. Do you require that the driver’s license and voter registration show the address of the property to which the homestead application applies?

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TN: Yes, all supporting documents have to be consistent with the homestead address.

 

Q. For “new arrivals”, they will not file a DC tax return until 2011. Will an allowance be made for this?

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TN: For those who are recent arrivals to DC and do not meet the filing requirements, they do not have to submit an income tax filing.

 

Q. Whether the applicant is a “new arrival” or a DC resident moving into a new home in DC, is it best to wait until all documentation is in place before filing, or should they file and supply documentation when it is available? Can additional information be supplied by fax or email, or should they file at OTR in person?

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TN: Under DC code 47-850, owners have to be domicile in the District in order to be eligible for the homestead deduction. We strongly encourage owners to submit the homestead application when all supporting documents are available. At minimum, a driver’s license and voter registration should be available. As stated in question #4, income tax filing are not required if they do not meet the filing requirement.

 

Q. Must the application with supportive documentation be filed within 30 days of moving into the new residence?

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TN:  An owner has up to 6 months to file their homestead deduction to claim their homestead deduction. Under DC Code 47-850.02, (c) “If a properly completed and approved application is filed during the period October 1 through March 31 of the tax year, the real property shall receive the deduction for the entire tax year. [I]f a properly completed and approved application is filed during the period April 1 through September 30, the real property shall receive 1/2 of the deduction for the second installment only.”  Owners do not have to submit their homestead applications during closing date, when they do not have any indicators of domicile status.

 

Written by Federal Title | 28 July 2010

A daily dose of headlines for real estate agents, mortgage lenders and consumers.

What might move mortgage rates in the weeks ahead? Mortgage News Daily: The movement of mortgage rates was more reflective of competition and "turn times" in the primary mortgage market. This has been a theme lately.	Home sales surge in June with inventory at 42-year low Reuters: But downward revisions to sales estimates for April and May left a picture of a weak housing market and perceptions of moderated economic growth.
Americans more trusting of financial industry The Atlantic: Since the financial crisis, banking, stocks, and the rest of the market have slowly begun to heal. Despite a relatively weak second quarter, Americans are feeling better about finance.	Housing shortage on the horizon? Smart Money: Take a step back from the current doom and gloom of foreclosures and declining sales and focus on the low construction levels over the past few years, some say a housing shortage might be in the offing.
Don't hold your breath for a bounce in home prices Forbes: Despite four years of falling prices and recent signs that they were finally bottoming out, homes are expected to lose still more value in many metro areas over the next year.	D.C. law expands no-smoking around buildings Washington Business Journal: Building owners and property managers in D.C. as of Tuesday will be allowed to post signs barring smoking within 25 feet of their outer walls.

Written by Federal Title | 27 July 2010

A daily dose of headlines for real estate agents, mortgage lenders and consumers.

The roller coaster ride known as short sale The New York Times: A recent search of sales listings found almost 20 advertised short sales, not including short sales disguised with euphemistic terms like “owner must sell.”	The government's role in the housing bubble The Atlantic: But this product is about as stable as a nitroglycerine shot with a TNT chaser. The 30-year fixed rate mortgage was ultimately at the heart of the crisis.
Seeking to close the 'strategic default' exit The New York Times: Some borrowers know it might take years for the value of their homes to exceed the size of their mortgages, so they walk away from loan and property.	Cities tackle traffic head-on with commuter options USA Today: Congestion costs the USA $87.2 billion a year in gasoline and lost productivity, that's 2.8 billion gallons of wasted fuel and 4.2 billion hours of wasted time.
Existing home sales still above historical median Calculated Risk: Because of the high number of low end foreclosures, and various government programs the number of existing home sales have stayed fairly high.	Historic Shaw residential project one step closer DC Mud: Chances of a small Shaw residential project are greater now that the project team has cleared the hurdles of Historic Preservation.

Written by Matt Bales | 26 July 2010

On June 1, 2010, Governer Charlie Crist signed into law Senate Bill 1196, which amends portions of Chapter 718 (Condominium Act) of the Florida Statutes. The following is a brief summary of that portion of the legislation included in Senate Bill 1196 that involves the bulk purchase of condominium units and which recently became effective on July 1, 2010.

The Distressed Condominium Relief Act (the "Act") protects bulk buyers or bulk assignees from assuming the developer's liabilities and responsibilities, provided that the conveyance of units is structured in accordance with the statutory requirements. The "Condominium Bulk Buyer Law," as it has commonly been referred to, removes significant barriers to condominium bulk buyer acquisitions, and investors wishing to purchase more than seven (7) condominium units will no longer be subject to accepting the original developer's liabilities.

For example, under the provision of the Act, a bulk assignee is not responsible for:

(i)      the warranties of the developer;
(ii)     obligation to fund the developer's converter reserves or warranties;
(iii)    obligation to fund the developer's assessment or budgetary deficits; or
(iv)    obligation to provide an audit during the time period in which the developer controlled the association.

The Act specifies when a bulk buyer or bulk assignee is required to turn over control of the condominium association and what documentation is required to be given to the association at the time of turnover It also specifies what documentation and information a bulk buyer or bulk assignee must provide to purchasers of units.

In order to take advantage of the Act:

(1) all statutory requirements thereunder must followed, and
(2) the bulk buyer or bulk assignee must acquire title to the units prior to July 1, 2012.

Written by Amy Bales | 26 July 2010

Florida Governor Charlie Crist sent a strong message to Florida legislature to take action on behalf of homeowners whose property values have suffered as a result of the Gulf oil spill.

On July 21, 2010, the day after the Florida Legislature shunned Governor Charlie Crist’s plan for an oil ban, the Governor attempted to give property owner’s affected by the oil spill a break by issuing an Executive Order.

The Order states that property appraisers in the affected counties are authorized “to provide interim assessments of any real property in the affected counties that may have suffered a loss in value as a result of the Deepwater Horizon oil spill. The purpose of this assessment is to document the “current year claims against British Petroleum and any of its agents or subsidiaries responsible for the disaster and other responsible parties.”

These interim assessments are then to be made available to the affected property owners to be used as documentation of any loss in real property value sustained as a result of the Deepwater Horizon oil leak to substantiate claims against BP and other responsible parties relating to the loss in value of the property.  

The documentation may also be used to substantiate claims for the economic loss resulting from liability for property taxes, which are based on the January 1, 2010 values despite a disproportionate reduction in the value of the real property caused by the oil spill.  

Although the Governor does not have the authority to issue tax rebates, it sends a clear message to the Florida legislature that action must be taken, at least in the areas of Escambia and Santa Rosa counties which are the counties most affected by the oil spill thus far.  

Written by Federal Title | 26 July 2010

A daily dose of headlines for real estate agents, mortgage lenders and consumers.

U.S. housing slump continues, D.C. doing better Washington Post: The Washington area has benefited from economic sectors, such as government, education and military-related businesses, that have done well recently.	Former homeowners ponder when to re-enter market Washington Post: Indeed, while some financially sophisticated professionals who foresaw the housing crisis have re-entered the housing market, others remain renters.
D.C. gets Triple-A rating on King Towers bonds Washington Business Journal: The bonds will finance a portion of the costs of acquiring, rehabilitating and equipping the King Towers apartment complex at 1220 12th St. NW.	Condo sellers should ensure projects are FHA-approved Los Angeles Times: Under a little-noticed edict put in place in December, the FHA is no longer approving mortgages on condominium units on a spot, loan-by-loan basis.
Affordable housing project in Columbia Heights DC Mud: "There was a lot of talk, scrutiny, and debate at city hall about this project ... but we are all glad that the talking has stopped, and the action has gotten back on track."	Doubling down on housing Wall Street Journal: Some intrepid homeowners are intentionally taking a loss on their current house in order to buy twice the home for not much more money.