Utah Home Mortgage Specialist

This week Collette shows you how to step up your hamburgers and impress your friends and family this summer season.  Got your own special recipe?  Let us know.

Download our favorite hamburger recipe now.

Email your best hamburger recipe to collette.mckee@comcast.net

Exciting News for Veterans!

The First Time Home Buyer and Long-time Resident Tax Credits have been extended for Military Personnel and certain Federal Employees.   Here are the basics:

• You must have been on active duty outside of the US for 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
• The home needs to be under contract by April 30, 2011
• You need to be closed by June 30, 2011
• You must been either a First-Time Home Buyer or Long-Time Resident 

Those are the basics of this new law.  If you have any other questions feel free to go to the IRS website and see the all the rules and restrictions.

I’ll see you at closing!

In this week’s Weekly Tip, I have had a little fun. Have you ever wondered what causes Brain Freeze when you eat or drink something that’s too cold? Click on the link to see what I found out, this will amaze you!!!

Sources and Publications

As always with taxes, nothing is ever simple or easy. Speak with a qualified tax professional for specific advice — an enrolled agent, a CPA or an attorney who specializes in tax issues.

Also, the IRS itself has excellent information at its website, www.irs.gov, by phone at 1-800-829-1040 and with specialized publications such as those below:
Publication 523, Selling Your Home

Publication 527, Residential Rental Property

Publication 530, Tax Information for First-Time Homeowners

Publication 535, Business Expenses

Publication 587, Business Use of Your Home

Publication 936, Home Mortgage Interest Deduction

Publication 946, How To Depreciate Property

 A 1031 exchange may allow investors to defer all capital gains taxes.

With a 1031 transaction, investment property is exchanged for “like” real estate. The basic requirements are that within 45 days after the “relinquished” property has been sold, a “replacement” property must be identified. The identified replacement property must then be acquired within 180 days after the sale of the relinquished property.

What’s important about a 1031 exchange is that the capital gains tax on the relinquished property is deferred — but it does not disappear. What really happens is that the basis for the new property (the “replacement property”) is reduced by the adjusted value of the “relinquished property” (the old property).

A 1031 exchange is complex and requires the services of a “qualified intermediary.” Among other tasks, a qualified intermediary holds the money from the sale of the relinquished property and applies it to the purchase of the replacement real estate. This must be done because under the rules for 1031 exchanges, the seller of a relinquished property cannot touch money from the sale — it must be held by the qualified intermediary.

Accounting for a 1031 exchange is also complex. Essentially there is a need to figure out the sale value of the relinquished property, add back depreciation and account for financing. I would like to offer you a free guide that talks in more detail about 1031 exchanges that’s well worth reviewing before meeting with a tax pro.  Email me at collette.mckee@academy.cc and I’ll send it to you a copy immediately.