The Dawn Thomas Team's Blog

Homeowner Records: What To Keep & How Long

Wed, 10 Mar 2010 09:27:00 GMT

Keeping full and accurate homeowner records is vital for determining not only your home deductions but also the basis or adjusted basis of your home. These records include your purchase contract and settlement papers if you bought the property or other objective evidence if you acquired it by gift, inheritance, or similar means.

You should also keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis. Here's some examples:

Putting an addition on your home
Replacing an entire roof
Paving your driveway
Installing central air conditioning
Rewiring your home
Assessments for local improvements
Amounts spent to restore damaged property

In addition, you should keep track of any decreases to the basis. Here's some examples:

Insurance or other reimbursement for casualty losses
Deductible casualty loss not covered by insurance
Payment received for easement or right-of-way granted
Value of subsidy for energy conservation measure excluded from income
Depreciation deduction if home is used for business or rental purposes

How you keep records is up to you, but they must be clear and accurate and must be available to the IRS. And you must keep these records for as long as they are important for the federal tax law.

Keep records that support an item of income or a deduction appearing on a return until the period of limitations for the return runs out. (A period of limitations is the limited period of time after which no legal action can be brought.)

For assessment of tax, this is generally three years from the date you filed the return. For filing a claim for credit or refund, this is generally three years from the date you filed the original return or two years from the date you paid the tax, whichever is later. Returns filed before the due date are treated as filed on the due date.

You may need to keep records relating to the basis of property (discussed earlier) longer than the period of limitations.

Note: Technically, basis is needed to determine gain on home sale (loss is not deductible). That need has diminished for most homeowners now that gain up to $250,000 ($500,000 in some sales by married couples) is tax-exempt.

Basis is still important, however, in figuring casualty loss, on conversion of the home to business use, or where there's a gift of the home (in this case, important to the donee).

Keep those records as long as they are important in figuring the basis of the property. Generally, this means for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you.

Tip: If you have any questions as to what items are to be considered in determining basis, please give us a call.

Richard Smith & Associates
10050 N. Wolfe Rd. Suite SW2-140
Cupertino, CA, 95014
Email me
Phone: (408)446-5551
www.RichardSmithTax.com

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Palo Alto, CA Real Estate Market Statistics - March 2010

Tue, 09 Mar 2010 00:00:00 GMT

Current real estate market statistics (single family homes) for Palo Alto, CA:

For Sale in Palo Alto, CA

Number of homes listed for sale: 77
Lowest list price: $699,000
Highest list price: $7,998,000
Number of REO banked-owned homes: 1
Number of Short Sale homes: 0

Sold in Palo Alto, CA

Number of homes pending sale: 44
Number of homes sold in last 30 days: 25
Lowest sale price in last 30 days: $682,500
Highest sale price in last 30 days: $4,450,000
Median sale price in last 30 days: $1,552,920

Here are the real estate trends for Palo Alto:

Data source: MLS Listings

Want more information about the market in your specific neighborhood? Give us a call or email us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

____________________________________________________________________
The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Liquidated Damages Clauses in California Real Estate Contracts

Mon, 08 Mar 2010 11:09:00 GMT

When a real estate transaction fails, the non-breaching party may seek to determine whether recourse may be had against the breaching party. A "liquidated damages" clause in a purchase agreement may simplify the resolution of the dispute.

Liquidated damages clauses in real estate (and other types of) contracts allow parties to contracts to agree in advance, before a dispute arises, how much money the seller will be entitled to collect from the buyer in the event the buyer defaults on the purchase contract. The typical liquidated damages clause in California real estate contracts provides that, if the buyer fails to complete the purchase as a result of the buyer’s default, the seller is entitled to the buyer’s deposit (or some other amount of money) as compensation for the buyer’s breach.

Liquidated damages clauses must comply with certain requirements in order to be enforceable. First, the amount of liquidated damages must be reasonable. Second, liquidated damages clauses must comply with certain statutory requirements relating to the formatting of the contract language. Civil Code § 1676.

Liquidated damages clauses in California real property purchase contracts must, in order to be enforceable, represent a "reasonable estimate" of the actual loss the seller will suffer in the event of the buyer’s breach. Civil Code §§ 1671(b), 1676, 3275. See also, Ridgley v. Topa Thrift and Loan Ass’n, 17 Cal.4th 970 (1998). Although the "reasonableness" of a liquidated damages clause is determined by many factors, the objective of the law is to fairly compensate non-breaching sellers for the loss occasioned by a buyer’s breach, while not unfairly punishing buyers. For personal residences (including properties containing four or fewer units), California law presumes three percent of the purchase price to be reasonable for purposes of liquidated damages. Civil Code § 1675.

Furthermore, to be valid, liquidated damages clauses in a real property purchase contracts must, if the contract is preprinted, be in at least 10-point bold type, or contrasting red print in at least 8-point bold type, and be separately signed by each party to the contract. Civil Code §§ 1676, 1677.

Liquidated damages clauses provide a buyer and seller with a degree of certainty; they know at the beginning of their transaction the amount of money the buyer might forfeit, and the amount the seller might recover, in the event the buyer breaches the contract. Although liquidated damages clauses might make resolution of any disputes comparatively easy, buyers and seller should understand that a seller’s actual damages in the event of a buyer’s breach may be more or less than the amount specified in the contract for liquidated damages.

Finally, non-refundable deposits are not the same as liquidated damages. A non-refundable deposit clause typically provides that the buyer must forfeit his or her deposit to the seller even if the buyer has a valid reason for not closing the transaction. On the other hand, a liquidated damages clause entitles a seller to the buyer’s deposit only if the buyer breaches the contract. Non-refundable deposit clauses in California real estate clauses are generally unenforceable.

Anthony F. Earle, Esquire
Earle Law Offices
A Professional Corporation
19925 Stevens Creek Boulevard, Suite 100
Post Office Box 1925
Cupertino, California 95015

Main: 408.786.1060
Toll-Free: 800.515.7560
Email me
www.earlelaw.com

What Will Happen to Your Pets?

Mon, 01 Mar 2010 11:21:00 GMT

It’s important to arrange for someone to care for your pet(s) and to specify that in your estate plan. Sadly, a significant number of domestic pets are unwittingly condemned to death or abandonment because their owners did not know—and were not well advised—to make arrangements for them.

You can set aside money to offset the care/feeding of your pet. You can also specify that your pet will require care if you are moving to a retirement community that does not allow for pets. You need to specify the person to care for your pets just as you would specify guardianship for a child. Don’t assume that friends, children or family will automatically come forward.

A friend of mine inherited her mother’s tortoises when she died. Tortoises can live upwards of 150 years. These animals may well need a plan B and Plan C given their unusually long lifespans. There is no guarantee that my friend’s daughter will want to take over the care of the tortoises in the future.

Another friend’s parents recently informed her that they have new “parents” for their beloved Havanese, Lily, should anything happen to them. My friend was relieved to hear it. Her parents are in their 70s and their dog is only 2 years old with a potential 14-16 year life span. My friend was concerned about what might happen to the furry “grandchild” in the event that her parents couldn’t care for her or moved to a retirement community that did not allow pets. My friend was reluctant to bring it up, so it was a great relief for her to find out that her parents had already considered their options and specified a new “forever” home for Lily.

Your local Humane Society may have a program designed to care for pets to make sure they are adopted and not euthanized. This is a terrific option for people who do not have someone who can take on their pets. The shelter will care for your pet until a new home can be found. The Humane Society of Silicon Valley (HSSV) has such a program locally. The North Shore Animal League located in New York also has a program and will take your pet regardless of where you live. These sorts of programs can require donations or fees for animal transport, so do your research and make sure you have a plan for your four-legged or winged friend.

You can put your wishes in your will, trust, or even prepare a pet trust (make sure that you specify pet care also in your power of attorney for property). It does not have to be anything elaborate, but you should have a plan for your pets so that they will have someone to care for them when and if you are no longer able to do so.

E.J. Hong, Attorney at Law
LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel: (650) 320-7680
Fax: (650) 320-7675

Palo Alto, CA Real Estate Market Statistics - February 2010

Tue, 16 Feb 2010 09:58:00 GMT

Current real estate market statistics for Palo Alto, CA:

Single Family Homes for Sale in Palo Alto, CA

Number of homes listed for sale: 68
Lowest list price: $750,000
Highest list price: $23,950,000
Number of REO banked-owned homes: 0
Number of Short Sale homes: 1

Single Family Homes Sold Stats in Palo Alto, CA

Number of homes pending sale: 40
Number of homes sold in last 30 days: 15
Lowest sale price in last 30 days: $795,000
Highest sale price in last 30 days: $2,800,000
Median sale price in last 30 days: $1,505,000

Here are the real estate trends for Palo Alto:

Data source: MLS Listings

Want more information about the market in your specific neighborhood? Give us a call or email us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

When, What, Where, How and Why Should I Buy?

Thu, 11 Feb 2010 10:40:00 GMT

(Part 1 of 3)

Balance in one's portfolio, as in life, is often easier said than accomplished. Questions arise that include:

1)   Is real estate safe? If so, when, what, where, how and why should I buy?
2)   Is the stock market safe? Again…when, what and why should I buy and for how long?
3)   How do I keep balanced in my stock and real estate portfolio?

These, and many others, are questions we ask ourselves as investors on a daily basis. Many of us may have had too much of one thing at one point in time, whether it was tech stocks in the late 90’s or real estate in 2006 through 2008 or now in 2010 with commercial property.

Many analysts have very complicated spreadsheets and graphs predicting what may happen or not happen in the future and based on these, investors must make hard decisions on what to do, how to proceed and what purchases they should make. There is no real crystal ball that is 100% accurate. If there was, I would not be writing this article, if you know what I mean!

One thing I have learned through my years of lending experience and course work on economics, lending and finance is something titled “The Four Cycles of Real Estate” which, based on my experience, repeats every 10 years or so and is applicable to investing in the stock market as well.

For real estate, every 10 or so years, each geographic area throughout the United States experiences a full circle, moving from a recessionary market (that we have experienced over the last 2 years) to a recovery market to a growth market to an oversupply market. It appears that each cycle lasts between 2 to 2.5 years but can vary from area to area. Based on my experience, an investor of real estate would should buy in the recessionary period when prices are low and sell in a growth market when prices are high. This application could be used with the stock market as well. Buy the stock (after researching it) when the stock is low and no one wants it and sell when everyone is buying it or when the stock is high.

With this model, you might not see the peak or the high point of real estate or stock prices but you certainly won’t see the low point either as so many investors experienced in 2001 and 2008 if they held on to the investment and had to sell. In summary, it seems that one of the major keys to creating balance while providing a good return on investment is when you buy and when you sell and in the case of real estate buying in the recessionary period, holding in the recovery period, selling in the growth period, staying in cash in the oversupply period and then buying again in the recessionary period.

In relationship to what, where and why to buy, on Thursday 2/25/10 I will provide part 2 and explain the “what and why” part and on Thursday 3/4/10 I will explain the “where” part.

If you have any questions on the above or would like to determine your purchasing power and financing options for a home purchase or investment property in the future, please contact me.

All the Best,

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
408-558-1422 (Renee Steff) Sr. Loan Coordinator
408-608-1921 Fax
CA Dept.of Real Estate - License # 01165697

Holding Real Estate Title: Slippery or Safe?

Mon, 08 Feb 2010 09:26:00 GMT

A colleague asked me to write a post on the different ways to hold title to real estate.

The nature of your assets and how you hold title to those assets (called character of the property) is a critical factor in the estate planning process. Before you take title (or change title) to an asset, you should understand the tax and other consequences of any proposed change. Your estate planning lawyer will be able to advise you.

Keep in mind that transferring title to a trust generally does not necessarily change the character of the asset unless the trust (or related document) changes the character. For example, if you and your spouse own property as joint tenants (which is considered separate property), merely transferring it to the trust does not alone change the character to community property (see below for more information). Moreover, just putting a person’s name on a deed can trigger gift or transfer (sale) consequences, so make sure you seek good legal advice.

Community property and separate property - In general, separate property is assets 1) owned by a spouse or domestic partner before marriage or registration of domestic partnership; 2) acquired by gift or inheritance; or 3) acquired while separated. All other property acquired during marriage or domestic partnership (such as earned income) is community property. (Note: For domestic partnerships, federal laws do not treat community property the same way that CA law does.)
Separate property can be converted to community property (and vice versa) by a written agreement. However, because taking such a step can have tax and other consequences, make sure that you understand such consequences before taking this step.

Joint tenancy with right of survivorship - Co-owners of real estate can hold title as joint tenants with right of survivorship. This means that, if one co-tenant dies, the property passes to the surviving joint tenant, no matter what the will says. The drawback to joint tenancy is that, if you’re married, joint tenancy only allows for a step-up in basis for the deceased joint owner’s half interest. A step-up in basis means that the basis of your house is stepped up to the fair market value at the time that an owner dies. In joint tenancy, only the deceased person’s half interest gets a step up in basis to the fair market value at time of death. So, if the surviving joint tenant were to sell the house, there would be a profit, perhaps resulting in having to pay capital gains taxes. Compare this to community property where both halves get stepped up in basis to the fair market value at the time one spouse dies, which will result in reducing profit and therefore capital gains tax. (See my previous post on 2010 on “What’s Going on With Estate Taxes?” for a brief explanation on the modified step up in basis in 2010.)

Tenants-in-common - This refers to an arrangement in which two or more people own real estate without a “right of survivorship.” Upon the death of one tenant in common, his or her ownership interest passes to the beneficiary named in a will or trust. If a co-tenant dies without a will, the heirs will be determined by the probate court according to the probate code. This applies to co-tenants who are married or in a domestic partnership as well as to those who are single. Note that, generally, a will goes through probate court and a living trust does not.
Community property with right of survivorship - If you are married or in a registered domestic partnership, you and your spouse or partner could hold title to property as community property with right of survivorship. Like joint tenancy, the property passes to the surviving owner regardless of what the will says.
Examples (not meant to be exhaustive):

First marriage: If you are in your first marriage and hold everything as community property, you should generally hold your property as community property and then do a will or a living trust (a living trust avoids probate but a will does not). Holding your property as joint tenants avoids probate but can have negative capital gains consequences. Community property with right of survivorship avoids probate but the IRS has not specifically ruled on the step up in basis with regard to this type of character. Moreover, community property with right of survivorship or joint tenancy with right of survivorship postpones probate but it does not avoid probate. For example, when the 1st owner dies, the transfer can occur without probate. But when the surviving owner owns it then as a single person, the asset will be probated if the interest has not been put into a living trust. Also, keep in mind that avoiding probate does not mean that you avoid conservatorship, make it hassle-free for your heirs, have adequate tax planning, or protect your children from creditors.

Married with Separate Property: If you’re married and you have separate property, you can have a joint trust with your spouse and still hold the separate property as a separate property in that joint trust. Or you can have two trusts, one community property trust and another a separate property trust.

Blended Marriage: If you’re in a second marriage and you have 2 different sets of children, you should carefully consider what is community property and what is separate property and how you want you provide for your current spouse as well as for your children. You do not want to disinherit your children or your spouse and you also do not want to create conflict between your current spouse and your children. You could leave your community property to your current spouse and your separate property to your children. Or you could leave all your property to your surviving spouse to use during his/her lifetime and then have it go to your children. This kind of situation can create conflict between the surviving spouse and your children though, so perhaps you should consider life insurance to give to the kids upon your passing so that they do not have to wait for the inheritance.

Single: If you’re single, you will hold it as a single person. Unless you transfer your property into a trust, your heirs will have to probate the assets.

Single with co-owner: If you’re single and someone else has contributed to the down payment, you and the co-owner can own the asset as tenants in common or joint tenancy. If you own it as tenants in common and one tenant dies, that interest will have to probated unless that interest is in a living trust. If you own it as joint tenants, your share will automatically pass on to the surviving joint tenant. This may not have been what you wanted though because you may have wanted to transfer your share to someone other than your joint tenant. Plus, again, you only postpone probate, not avoid it.

Gifts - I have to explain gifts and gift taxes here. Remember that any amount that you give to anyone is a gift and there are gift tax consequences over $13,000 this year (lifetime exemption of $1,000,000), unless there is an exemption. A commonly used exemption is gifts to a US citizen* spouse, which is unlimited (“unlimited marital deduction”). If you put your U.S. citizen spouse on your deed when that spouse has not contributed financially to the asset, it is exempt from gift taxes because of the unlimited marital deduction. So, when you want to put someone on the deed as a joint tenant because you want to avoid probate, and this person is not your US citizen spouse and has not contributed financially or the amount commensurate to the value of the share that he/she owns, you have a gift issue.
                    *If you are a non-US citizen, you do not have the unlimited
                      marital deduction and your estate tax exemption is different
                      from US citizens. If you are a non-US citizen, you should
                      seek qualified help.

This all may seem very technical, but this actually just touches the surface of the issues involving title to your house and this cannot substitute good holistic, legal analysis of your entire estate. Your house is most likely your most valuable asset and you should make sure that you 1) own it in the right way; 2) that you have a plan for who will inherit your hard-earned property; 3) that you minimize taxes and costs as much as possible; and 4) that you have a plan for someone to manage your assets if you become disabled or incapacitated.

LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel: (650) 320-7680
Fax: (650) 320-7675
Website

Teachers Make the Grade With Special Loan Program

Thu, 04 Feb 2010 00:00:00 GMT

Great Teacher Loan Program

We recently helped a teacher purchase their home with the CalSTRS loan program. Initially the buyers wanted an FHA loan but did not like the fees and mortgage insurance associated with the loan. The CalSTRS loan which allowed them to forgo mortgage insurance, pay fewer points and significantly lower their cost of financing. Below are some benefits in the CalSTRS loan program.

If you know of a public school teacher or public school employee, please pass on this information. Below are some of the details on the program:

•   Max purchase price of $670,103
•   No Mortgage Insurance required (unlike FHA loans)
•   3% down payment (1% can be from the borrower with the remainder from a family gift)
•   Credit scores as low as 620 on conforming; 680 on high balance conforming
•   Deferred mortgage payments on 2nd loan for 1st five years
•   Only 2 month's reserves required by lender
•   Must be a member of CalSTRS.

Have your favorite teacher call us for more information!

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA 95128
A Dept.of Real Estate - License # 01165697

When Should I Update My Trust?

Wed, 03 Feb 2010 13:00:00 GMT

*This blog contains general information and is not meant to apply to a specific situation. Please seek advice of counsel before proceeding as each case is unique.

Now that most of us have trusts (or have been thinking about getting one…sometimes for several years!) we need to know how often to review the documents. There are those (you know why you are!) who sign the trust, pack it away, and never, ever look at it again.

First, it is a good idea to go over the trust and the Will after the initial flush of accomplishment has faded. Really look at the trust to be sure you understand what it does. Is it a revocable living trust for a couple? Does it split into sub trusts at the first death? Is the split mandatory or discretionary? Who are the successor trustees? You will need the answers to these questions in order to understand when to review the trust at a later date. Those pesky warnings in the newspaper may mean more, also.

For example, you might be hearing that the Federal Estate Tax is no longer in existence. This means that the estate of all those who die in 2010 will not have to pay the Estate Tax. But wait. Did you know that it returns next year? That’s right, the current law provides that any decedent’s estate worth more than $1,000,000 next year will pay tax at a rate of forty-five percent on the amount over $1,000,000. This information means more in the context of your own estate plan. If a couple’s estate is worth $1,500,000 and one dies next, but has a living trust that splits at the first death, you may be covered and pay no estate tax at the second death.

Second, it is a good idea to review the trust each year. Do you still have faith in the named successor trustees? Has your daughter matured enough so that she can receive her inheritance at age thirty, instead of, sixty? Has your son joined a cult leaving his wife and ten children? You may want to amend the trust and give his share of the estate in trust for the support of the children.

Third, be sure to update the list of trust assets anytime an asset is sold or acquired.

Brown Law Offices

Diane M. Brown, Attorney at Law (specializing in trusts and estates)
14130 Winchester Blvd., Suite G
Los Gatos, CA 95032
Voice: 408-376-2755
Fax: 408-376-2763

Los Altos, CA - Real Estate Market Statistics for February 2010

Tue, 02 Feb 2010 00:00:00 GMT

Current real estate market statistics for Los Altos, CA:

Single Family Homes for Sale in Los Altos, CA

Number of homes listed for sale: 54
Lowest list price: $995,000
Highest list price: $4,995,000
Number of REO banked-owned homes: 0
Number of Short Sale homes: 1

Single Family Homes Sold Stats in Los Altos, CA

Number of homes pending sale: 27
Number of homes sold in last 30 days: 14
Lowest sale price in last 30 days: $1,100,000
Highest sale price in last 30 days: $2,450,000
Median sale price in last 30 days: $1,462,500

Here are the real estate trends for Los Altos:

Data source: MLS Listings

Want more information about the market in your specific neighborhood? Give us a call or email us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

Group Real Estate Investment

Mon, 01 Feb 2010 12:01:00 GMT

Getting a group of interested parties together to purchase real estate can provide great advantages. You can purchase real estate of higher value that what may be available to you individually. It can also be a great way to get started with real estate investing. However, there are some steps you should follow to avoid having problems down the line.

First, ensure your mortgage contains a non-recourse clause. This provision keeps the personal property of each group member from being at risk in the event of a default. The lenders recourse is limited to foreclosure and acquisition of the property. This means your personal property, other real property, and income are out of the lender’s reach.

Second, ensure you have a clear agreement between the parties on how you will split mortgage payments, property taxes, insurance and maintenance on the property. Include dates to comply with things like maintenance, and the possibility that unexpected repairs may need to be made.

Third, agree on how and when you will sell the property, including the possibility of a loss and how the loss will be apportioned. Although real estate investment is historically sound as a long term investment, short term real estate investors have faced problems in our current economy.

Fourth, consider setting up an entity such as a limited liability company for holding the real property. This will provide further liability protection and provide a clear way to spell out the parties responsibilities in the investment.

Lastly, make sure you do your due diligence in deciding who your investment partners will be. Many friendships and families have been in turmoil because of the financial issues surrounding a real estate investment. Understand your intentions, your exit strategy and your responsibilities before you make a decision.

For more information on real estate law, contact:

Elena Rivkin Franz, Attorney at Law
Pratt & Associates
1901 S. Bascom Avenue, #350
Campbell, CA 95008
(408) 369-0800 ext. 202

Willow Glen - San Jose, CA: Real Estate Market Trends - Jan 2010

Tue, 26 Jan 2010 00:00:00 GMT

Here are the real estate market statistics for the Willow Glen area of San Jose, CA for January 2010:

Overall Market Snapshot: Willow Glen - San Jose, CA - January 2010
Currently on the Market in Willow Glen:
# of Homes On Market	115
Lowest Price Listing Currently on Market	$189,500
Highest Price Listing Currently on Market	$2,999,000
# REO Bank-owned Properties on Market	11
# Short Sales on Market	23
Recent Sales Data for Willow Glen:
# Homes Pending Sale	88
# Homes Closed in Last 30 Days	30
Lowest Price Sold in Last 30 Days	$250,000
Highest Price Sold in Last 30 Days	$1,700,000
Median Price in Last 30 Days	$762,500

Trends over the Last Year in Willow Glen - San Jose, CA

Data source: MLSListings

Want more information about the market in your specific neighborhood? Give us a call or email us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

8 Tips To Choose a Tax Preparer

Mon, 25 Jan 2010 00:00:00 GMT

It is important to exercise due diligence when selecting and retaining a tax professional. Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another person or firm. Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it’s important to find a qualified tax professional. The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.

Check qualifications. Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
Check professional record. Check to see if the preparer has any questionable history with the licensing authorities such as the IRS, the state’s board of accountancy for CPAs, or the state’s bar association for attorneys.
Ask about fees. Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
Determine accessibility. Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
Provide all records and receipts. Most reputable preparers will ask to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
Review your return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Make sure the preparer signs your return. A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

Tax Credit - Yes! But E-File Taxes - No.

Thu, 21 Jan 2010 00:00:00 GMT

Attention Home Buyers: Are you ready to claim your First-Time Homebuyer Tax Credit?

Uncle Sam wants you to have it - but the IRS is not making it easy. You can NOT claim your tax credit using e-file. You must file a paper return instead.

Go to the following IRS web page and fill out the 5405 form. You will also be required to include proof of residency, a signed mortgage statement and drivers license.

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loans
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA 95128
A Dept.of Real Estate - License # 01165697

Tornados in California?

Wed, 20 Jan 2010 17:41:00 GMT

Did you miss the tornado warning issued for Santa Clara County today?

I just learned about a new system operating across Santa Clara County for Emergency Alerts. Check it out & register here: http://www.alertscc.com.

Be safe!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

Cut Down Your Move Time (and Save Some Money)

Wed, 20 Jan 2010 09:39:00 GMT

Some people hire a moving company to do everything; pack, move and unpack. This is a wonderful service and is the way to go if you can afford it.

For others there are things you can do to cut down the move time and save some money.

Pack Everything: If it's small enough to fit in a box put it in one. Don't overfill boxes, overstuffed boxes are difficult to move and slow down the process. The heavier the item the smaller the box; i.e. books, CD's and canned food should go into book boxes (1.5 cubic feet).

Organize: Label the tops and sides of all boxes with room name. Disconnect computers /stereo equipment and label the cables

Staging: if you have items in the attic or basement, bring them out ahead of time.

Boxes: Moving all or some of your boxes to the garage can cut down time.

For more packing tips go to All Reasons Moving & Storage.

Kim Tucker

All Reasons Moving, Inc.
(408) 486-0663
www.allreasonsmoving.com

Mountain View, CA - January Real Estate Market Snapshot

Tue, 19 Jan 2010 10:59:00 GMT

Here's the monthly real estate market snapshot for Mountain View, California. Just like its neighboring cities in Palo Alto and Los Altos - Mountain View is seeing some interesting changes in the real estate market.

Over the past month, the median list price for both single family homes and condos in Mountain View is down. See our December Mountain View Real Estate Snapshot to compare with the numbers summarized below.

Additionally - the number of homes on the Mountain View market is down drastically. Indeed - the talk in real estate offices on the peninsula gravitates these days to our qualified buyers who have seen everything on the market and are ready to buy something as soon as they find something.

With this demand - you might expect that the "days on market" would be trending down as well. But it's not. For both single family homes and condos - the average days on market in Mountain View is up - a lot- over over the past month. At the same time - we are seeing certain properties come onto the market - sell very quickly (in a matter of days) - sometimes with multiple offers.

So what does this mean? Potentially the market is really two markets. Properties that are well-priced (relative to the current market) are selling. Other properties that may not be quite priced for today's market are taking longer to sell. And oddly - it's not just the higher end. For both condos and single family homes - the "mid range" homes are selling faster than either the lower or higher price points.

Here are the numbers:

Overall Market Snapshot: Mountain View, CA as of January 18, 2010
	Condos	Single Family Homes
Median List Price	$457,494	$799,000
Average List Price	$473,304	$904,601
Least Expensive Listing	$187,160	$475,000
Most Expensive Listing	$949,000	$1,688,000
Asking Price per Sq. Foot	$410	$546
Average Days on Market	151	182
Total # of Properties on Mkt	56	41
Median Home Size (sq ft)	1044	1280
Median Lot Size (sq ft)	--	4501-6500
Median Number of Bedrooms	2.0	3.0
Median Number of Bathrooms	2.0	2.0
Median Age (years)	31	46

The trend over the past year for median home prices in Mountain View (single family homes in orange, condos in black):

Inventory trends in Mountain View (single family homes in orange, condos in black):

Days on market for homes in Mountain View (Single family homes in orange, condos in black):

For more information, data, graphs or juicy real estate details on your neighborhood - call us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(650) 947-4659
CA DRE License: 01860743

What’s Going on with Estate Taxes?

Mon, 18 Jan 2010 00:00:00 GMT

I am writing this post on Martin Luther King Day. I think about his courage, his character, his commitment to a greater purpose. Few of us can hope to achieve the sort of immortality and lasting impact of Martin Luther King. But we can be inspired by him. And we can find the courage to do difficult things because we know they are right. And in our daily lives, drafting an estate plan can be one of those things. It takes courage to contemplate the future, and to plan for unforeseen events. And to meet our fears or worries head on. But by making a plan now, you can be a hero to your own family. And leave a legacy that will comfort those who you love and care about.

And given the recent expiration of estate tax laws on January 1, 2010 and the confusing issues we face, it’s important to choose a trusted advisor who specializes in estate planning to navigate the muddy waters.

Estate Taxes

Estate tax laws expired on January 1, 2010 and there is no clear indication when Congress will address the issue. In 2009, there was a federal tax of up to 45% on estates valued at $3.5 million or more. Under a sunset provision in the law, the so-called death tax disappeared in 2010. But the tax will be reinstated in 2011 for estates over $1 million — and at a rate of 55%. Not only that, Congress could retroactively change it even after January 1 of next year (although this will not happen without some litigation, I’m sure. Plus, I’m pretty certain that there will be some loopholes).
As a background to the question of the estate tax, a measure was passed in 2001 by Congress that made big reductions in the federal estate tax, phased in through 2009, and then repealed the tax, for one year only, in 2010, with the tax reinstated in 2011. For years, legislators in Washington have said they would make sure the estate tax law didn't disappear by the end of this year. But with health care legislation taking center stage on Capitol Hill, the full Congress has yet to address the estate tax. The House did pass a bill tackling the tax earlier this month, but the Senate hasn't had time to consider the issue.

Generation Skipping Tax

With the expiration of the estate tax law, the generation skip tax also disappears. Generation skipping tax is the tax on transfers to grandchildren (and others who qualify as the next generation after your child) over a certain amount. Starting Jan. 1, individuals can gift to grandchildren and pay only gift tax on the money. But again, Congress could pass a law that is retroactive.

Step Up in Basis

Although the generation skipping tax is gone for the time being, there is a limited step up in basis ($1,300,000 for individuals and $3,000,000 for community property) which may mean capital gains taxes. This may affect more heirs than estate taxes. Before 2010, the basis of an asset belonging to a deceased person was stepped up to the fair market value at the time of that person’s death (no limit). For example, let’s that I died in 2009. I had bought a house for $20,000 years ago and when I died in 2009, the value of the house was $3 million. The basis on my house would not have been $20,000 but $3 million. Therefore, if my kids were to sell this house for $3 million, they would not have had to pay any capital gains taxes. But now, this step up in basis is longer allowed, so there will be capital gains tax. In my example, my kids would have a profit of $2,980,000 and they could only deduct $1,300,000 from the profit, so they have to pay capital gains tax on the balance which is $1,680,000.

What to do?

Confusing? Yes, it is. But this should not be a reason not to do estate planning. This just reinforces what I have been saying in previous posts that estate planning is not a cookie cutter approach and that one size does not fit all. This is the time when you need a qualified expert to help you through this labyrinth.
For my clients, given the information at the time of the drafting, I have drafted your estate plan to take this year into account and with flexibility (but if your situation has changed significantly since the time that I drafted your plan, you may need to revisit your plan). If you’re not an existing client, this should provide a good reason for you to have it reviewed by an estate planning attorney, especially if your plan was written before 2001. If you do not have an estate plan, your estate plan should have language to take this year into account and also allow for disclaimers (you give up your right to own the asset owned by your deceased spouse, but it goes into a bypass trust which allows you to use it during your lifetime). If you experience death of a family member this year, you should go see an estate planning attorney and weigh the advantages and disadvantages of doing subtrust funding (you have 9 months to disclaim assets). If you want to give to your grandchildren, you might consider doing it sooner than later before Congress acts (but proceed with caution).

Again, estate planning needs to be customized. Finally, as I have written in previous blogs, there are many compelling reasons to draft an estate plan (to avoid probate, to avoid conservatorship, to protect your family and to ease stress). So don’t let Congress’ inaction stop you from acting – the reasons for doing an estate plan still exist, maybe even more today than ever.

E.J. Hong, Attorney at Law
LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel: (650) 320-7680
Fax: (650) 320-7675

Maximize Your Kitchen for Less!

Fri, 15 Jan 2010 08:41:00 GMT

How many hours do you spend in the kitchen each day? If you’re like me, the answer is a lot! In many homes the kitchen is the hub, and everything from daily life to entertaining guests stems from this room. Did you know that a kitchen upgrade or remodel is one of the best places to put your home improvement dollars? Though there are plenty of men doing the cooking these days, women are usually the ones who fall in love with beautiful kitchens when searching for a new home.

Since not everyone can afford to completely demo their kitchen and rebuild from scratch, here’s some ideas of how you can freshen up your kitchen for less! When making your choices, think about beauty AND function.

Refresh the Cabinets ~ There are a few ways of doing this, and it all depends on what you’ve got to start with. If you have older cabinets with doors that aren’t very decorative, my favorite advice is to replace the doors and drawer fronts. This is easily done, and provides an instant upgrade. If you can’t match the existing finish on the cabinets (which is likely), then refinish or paint everything to match. Replace the hinges, door and drawer hardware, and you’re done!

I recently finished a renovation on this kitchen, and we kept the existing cabinets in tact. They were very dated (as you can see from the before photo), but in great shape, so repainting them and adding some new hardware gave them a fresh and updated look! We also added a raised bar, to maximize functionality. It cost $3,300 to have the cabinets professionally prepped and painted, and I estimate new cabinets would have been $18,000 and up. What a savings!

Replace the Countertops ~ No surprise here! Though granite has been the desired surface for many years, there’s a myriad of choices for countertops, and it’s an instant upgrade to your kitchen. And, don’t stop there! While you’re at it, replace the sink too. Most kitchen sinks are under-mount (meaning the edge of the sink is underneath the countertop), so now is the time to put in a fresh one.

Upgrade the Appliances ~ We don’t change our appliances like we change cell phones, but if you have appliances that are 20 years old, the money to replace them are dollars well spent, not to mention the new pleasure you’ll find in cooking! Gas cook tops and ranges are usually preferred over electric by avid cooks, and stainless steel has been the favorite finish for several years running. I love it because the color goes with everything, and find that it works well with any design style as well. Look at what a beautiful difference it made in this kitchen! The impact of other upgrades would have been much less, had we kept the old appliances.

I hope you enjoy my home improvement and decorating tips! If I can give you any assistance with your design or decorating needs, please don’t hesitate to call or email me. Many times a single consultation is all that’s needed to pull your ideas together!

Everyone deserves a home they love ~ Inside and Out!

Kathy Sturr, Designer
Inside-Out Designs
408-626-8272
My Website
My E-mail

Have You Heard of Regulation X?

Thu, 14 Jan 2010 12:20:00 GMT

We wanted you to be aware of the many changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.

The “new GFE (Good Faith Estimate) 2010” may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any "change" to rate, fees, extensions, sales price, credits, etc... or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable escrow, title and lending institution that you know and trust to handle your transactions. This is not a market for rookies!

There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract. We will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.

We have hit the ground running with significant training and education to keep us at the front of the pack. We will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future. We appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. We are committed to your success and know that 2010 will be solid year for Real Estate.

Best regards,
Rob McCarthy
Owner and Senior Mortgage Planner
Email me
408-377-4123 Direct
408-608-1921 Fax
CA Dept.of Real Estate - License # 01763070
www.thehontegroup.com