All Forum Posts by: Dan Schwartz

@Robyn Gersh, I’m “able” to drive 100mph on the highway....unless I get caught and punished.  Please take Brian’s comments seriously.  He is one of the many experts here on BP that are extremely knowledgeable in this area.  

At the same time, I’m sure we could all benefit from your sharing your detailed opinions of why this arrangement is permissible.  Maybe you’re trailblazing on the leading edge of something!  

@John Montgomery is that rate for a primary or a rental?  We are working with Alliant Credit Union on refis right now.  First up is primary, which we locked at 3.375 last week (we didn’t benefit from this week’s rate drop) and $3,800 in closing costs, including .125 points.  Pricing on the investment properties is roughly 1.000% higher.  

@Roberta Marcos Marcos your $800 is a startup cost. It’s very common.  We started incurring costs for our first rental late in one tax year, and didn’t collect rent until March of the next tax year.  It will be deductible as a start up cost the year you start actually generating income.  If your startup costs are less than $5,000, you can expense it as a “start up cost” under “other expenses” rather than amortize it over 15 years (which I point out only because you might find something amount amortizing start up costs on the web somewhere).

@Michele Patterson my thought on almost anything Google makes is “will it still exist in 5 years?”  Google gets bored of products very easily, notable exceptions of gmail, google docs, and anything on their as platform aside.  

@Michael King

Dude, if after 11+ years you still can’t figure out what you signed up for, there’s nothing I can do to help.  

But for the record, the fact that this credit is repayable is in the first paragraph of the form you (or someone) filled out to claim it.

Source: https://www.irs.gov/pub/irs-pr...

Text: Purpose of Form
Use Form 5405 to claim the first-time homebuyer credit. The credit may give you a refund even if you do not owe any tax.
For homes purchased in 2008, the credit operates much like an interest-free loan. You generally must repay it over a 15-year period. For homes purchased in 2009, you must repay the credit only if the home ceases to be your main home within the 36-month period beginning on the purchase date. See Repayment of Credit on page 2.

And once more for good measure:
George Bush (President from Jan 20, 2001 to Jan 20, 2009) signed your onerous credit into law.  

Barack Obama (President from Jan 20, 2009 to Jan 20, 2017) signed into law a revision to your onerous credit which increased the amount and made it an outright grant that never had to be repaid.

The instructions of the 2009 form 5405 specifically say, “If you own the home and use it as your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit or file Form 5405 again.”

None of this is really that hard to grasp, but.....”Obama Tax.” LOLOLOLOL (yes, that is indeed me laughing).

Sorry, OP, for high jacking the thread.  

All of the Philly banks of my youth are probably gone now....  but I still get an earworm of the jingle “just say hello...to...Meridian Bank” which became CoreStates which became First Union which became Wachovia which became Wells Fargo (I think I have that right). I also liked Fox Chase Savings & Loan. They would come to our elementary school, collect our pennies and log them as deposits in passbook savings accounts. My how much has changed in 35 years.  Thanks for the trip down memory lane.  The advice from the other guys is solid ;-)

I guess there’s a place for both strategies.  At 0.125 points for a 0.125 rate decrease (as we were offered once), I look at it as “I can pay an eighth today, or I can pay an eighth a year for as long as I have the mortgage.”  

Ok @Michael King, so let’s review.  

You bought a house in 2008, using a Bush-era program that was written effectively to be an advance of your federal taxes due, which needed to be repaid over 15 years beginning in 2010.  

That program was modified in 2009 (yes, we consider that Obama-era, since he was a Senator in 2008 and president in 2009) to become aN even-larger refundable tax credit that never would need to be repaid.  

And you call it an “Obama Tax.”

cool story, bro.  

Follow up....we locked at exactly the rate and price disclosed in the daily email.

@Michael King what in the world is an “Obama Tax,” and how have you been paying an Obama tax for 15 years?