Taxes Blog

Finance Blogs » Taxes » Tax breaks, homebuyer credit on hold

Tax breaks, homebuyer credit on hold

By Kay Bell · Bankrate.com
Friday, June 25, 2010
Posted: 9 am ET

Remember yesterday when I suggested you do all you can to close on your new home by June 30 if you want to claim the first-time homebuyer credit on your 2010 taxes?

The Senate made that advice more urgent last night when, for the third time it was unable to sign off on the tax extenders bill. That measure is what the proposed closing date of Sept. 30 was attached to.

Now, say Senate leaders, they're through with the tax bill, formally known as H.R. 4312 or the American Jobs and Closing Tax Loopholes Act of 2010 ... at least for a while. Senate Majority Leader Harry Reid, D-Nev., says he's putting it on the back burner and will focus instead on a small business legislation.

How long can Capitol Hill put off the extenders bill? Well, it's not unusual for the House and Senate to be in session as the December holidays draw even closer. They can always make tax laws retroactive, which might be fine with them, but is a royal pain when you're trying to make effective tax plans.

However, since the extenders bill also contained unemployment benefits money and out-of-work voters are generally unhappy voters, Senators might give the tax bill another shot when they get back from the July 4 break.

Or they could pull the unemployment provisions out and consider them separately.

Or they could tack them onto the small business bill.

Reid says that's not an option, but as time passes and folks get angrier about not being able to find a job and not having any help from Uncle Sam in making ends meet, Congressional minds might change.

As for the expired tax breaks that the extenders bill was to remedy, lawmakers literally have months.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
4 Comments
elyse kay
June 28, 2010 at 11:03 am

Not extending the home buyers tax credit would be devasting to my friend as well as many others. She has been in contract since February and finally got the confirmation this past Friday June 25th that they want to close on or before July 31st. Because this is a short sale (like many other homes) the process takes much longer and for a government representatives to not issue an extension is ridiculous. There was no delay by them in issuing bail out money to these same banks. Most of these short sales are also in extreme disrepair and the tax credit is urgently needed

kgrayson
June 25, 2010 at 12:26 pm

By not passing this extension of the homebuyer tax credit,undo stress is placed on thousands of people including the lenders, escrow companies etc that are trying to close all the loans within the deadline. This should be made a seperate amendment and just get done. Retroactive actions will heal the financial impact but not the hurt and blame that will happen if the extension is not done prior to the expiration and deals do not get closed on time.