The 2009-2010 Colorado SKi and Boarding Guide

The much anticipated ski and snowboarding season is finally here!  For those of us that are fortunate to live in Colorado with its World Class ski resorts, this is one of the most anticipated seasons so dust off those boots and boards and get planning your next ski visit!

Loveland kicked off the Colorado ski/snowboard season Oct. 7, and it was followed by Arapahoe Basin (A-Basin to the locals), Breckenridge, Copper Mountain (great boarding mountain), Keystone (night skiing too), Wolf Creek (averages 465 inches of snow annually!!) and Winter Park openings.  By Thanksgiving weekend, Aspen Mountain, Beaver Creek, Crested Butte, Durango, Eldora, Monarch, Ski Cooper, Snowmass, Steamboat and Telluride will open!!  So after you finish carving the turkey, go carve some turns!

And because this is Colorado, you WILL need sunscreen, sunglasses and plenty of water…trust me as I learned the hard way when I first moved out here from Massachusetts…you will get a sunburn if you don’t wear sunblock!

Here’s a look at Colorado resorts, including opening dates, mountain stats and what’s new. 

Arapahoe Basin

Scheduled opening date: Oct. 9

Number of lifts: Seven

Skiable acres: 900; 60 percent expert, 30 percent intermediate and 10 percent beginner

Mountain talk: Ski Magazine ranked it No. 4 in its best-value category and Skiing Magazine in its Top 10 in steeps. Recent upgrades helped it post its second-best year (409,810 visits) last season.

Web site: www.arapahoebasin.com

Aspen Mountain

Scheduled opening date: Nov. 26

Number of lifts: Eight

Skiable acres: 673; 52 percent expert and 48 percent intermediate

Mountain talk: Ski Magazine ranked it No. 2 in best apres, and Skiing Magazine ranked it No. 3 in apres and among the top 10 in steeps. More than $130 million has been pumped into the resort over the past six years, including 11 new lifts, two new gondolas, the Treehouse Kids’ Adventure Center, three new restaurants and additional terrain. It will once again host the ESPN Winter X Games in January for the 10th time.

Web site: www.aspensnowmass.com

Aspen Highlands

Scheduled opening date: Dec. 12

Number of lifts: Five

Skiable acres: 1,028; 52 percent expert, 30 percent intermediate and 18 percent beginner

Mountain talk: Skiing Magazine ranked No. 6 in the best overall resort category. It also ranked No. 5 in scenery by Ski Magazine, No. 6 by Skiing Magazine and No. 8 by Ski Magazine in steeps and No.7 by Ski Magazine for weather.

Web site: www.aspensnowmass.com

Beaver Creek

Scheduled opening date: Nov. 25

Number of lifts:17

Skiable acres: 1,815; 38 percent expert, 43 percent intermediate and 19 percent beginner

Mountain talk: Moved up one notch to No. 6 in Ski Magazine’s overall best resort category. This resort is among the most luxurious in Colorado. The Birds of Prey Run is legendary.

Web site: www.beavercreek.com

Breckenridge

Scheduled opening date: Nov. 12

Number of lifts: 30

Skiable acres: 2,358

Mountain talk: Ranked No. 15 in Ski Magazine’s top overall resorts. The Peak 7 base debuted last year while reconstruction of the Peak 8 base is on track with a proposed late-spring opening.  This year marks the 25th year of snowboarding here.This year, it will host the Winter Dew Tour on Dec. 18-20. It offers four terrain parks and three pipes, including the top-ranked Freeway Terrain Park/Pipe, a park progression system for beginners and intermediates. Also boasts 720 acres of bowl skiing/riding.

Web site: www.breckenridge.com

Buttermilk

Scheduled opening date: Dec. 12

Number of lifts: Nine

Skiable acres: 470; 26 percent expert, 39 percent intermediate and 35 percent beginner

Mountain talk: Transworld Snowboarding ranked the terrain park and half pipe No. 1 and the resort No. 3 overall.

Web site: www.aspensnowmass.com

Copper Mountain

Scheduled opening date: Opened Nov. 6

Number of lifts: 22

Skiable acres: 2,465; 54 percent expert, 25 percent intermediate and 21 percent beginner

Mountain talk: Ski Magazine ranked it No. 18 on its top overall resort list and No. 9 in the best park category. Recently opened the Woodward at Copper, which is the first indoor/outdoor ski and snowboard camp. The 20,000-squarefoot Woodward at Copper Barn gives campers access to jumps, foam pits, spring floor, trampolines and indoor skateboard features.

Web site: www.coppercolorado.com

Crested Butte

Scheduled opening date: Nov. 25

Number of lifts: 16

Skiable acres: 1,125; 20 percent expert, 57 percent intermediate and 23 percent beginner

Mountain talk: It topped Colorado’s resorts in Skiing Magazine’s steeps category, ranking No. 5, while ranking No. 10 in Ski Magazine’s steeps category. The resort continues to go through a major rebuilding mode. Highlights include a new base area Adventure Park, including an ice skating rink that is the first in Colorado to use synthetic ice, and a lift-served tubing hill. The beginner area has a new learning area. And the DC Terrain Park has been expanded.

Web site: www.skicb.com

Durango (Purgatory)

Scheduled opening date: Nov. 27

Number of lifts: 10

Skiable acres: 1,200; 26 percent expert, 51 percent intermediate and 23 percent beginner

Web site: www.durangomountainresort.com

Echo Mountain

Scheduled opening date: Dec. 2

Number of lifts: Three

Skiable acres: 85; 20 percent expert, 60 percent intermediate and 20 percent beginner

Mountain talk: The closest riding to Denver, it is launching a new ski and ride program. Guests can choose from several multi-week programs for kids ages 4-14 and their parents.

Web site: www.echomt.com 

Eldora

Scheduled opening date: Dec. 2

Number of lifts: 12

Skiable acres: 680; 30 percent expert, 50 percent intermediate and 20 percent beginner.

Mountain talk: The resort has significantly upgraded its Web site to make it more interactive.

Web site: www.eldora.com

Keystone

Scheduled opening date: Nov. 5

Number of lifts: 20

Skiable acres: 3,148; 49 percent expert, 32 percent intermediate and 19 percent beginner

Mountain talk: Last year, it began the new state-of-the-art eight-passenger gondola in River Run Village

Web site: www.keystoneresort.com 

Loveland

Scheduled opening date: Oct. 7

Number of lifts: 10

Skiable acres: 1,365; 46 percent expert, 41 percent intermediate and 13 percent beginner

Mountain talk: Loveland was the first ski area in North America to open. The opening was its earliest in 40 years. It topped Ski Magazine’s list of best-value resorts. This year, it added a Magic Carpet lift to Loveland Valley for its children’s ski programs. It also did $500,000 in renovations to its base.

Web site: www.skiloveland.com

Monarch

Scheduled opening date: Nov. 25

Number of lifts: Seven

Skiable acres: 800; 58 percent expert, 28 percent intermediate and 14 percent beginner

Web site: www.skimonarch.com

Powderhorn

Scheduled opening date: Dec. 17

Number of lifts: Four

Skiable acres: 1,600; 30 percent expert, 50 percent intermediate and 20 percent beginner

Web site: www.powderhorn.com

Sol Vista

Scheduled opening date: Mid-December

Number of lifts: Five

Skiable acres: 406; 20 percent expert, 30 percent intermediate and 50 percent beginner

Mountain talk: Good place for the beginner skiing/riding family

Web site: www.solvista.com

Ski Cooper

Scheduled opening date: Nov. 26

Number of lifts: Five

Skiable acres: 400; 30 percent expert, 40 percent intermediate and 30 percent beginner

Web site: www.skicooper.com

Snowmass

Scheduled opening date: Nov. 26

Number of lifts: 21

Skiable acres: 3,132

Mountain talk: Ranked No. 1 snowboarding resort by Transworld Snowboarding Magazine, No. 2 by Freeskier Magazine and No. 6 by Ski Magazine. Also ranked No. 3 by Freeskier, No. 4 by Transworld and No. 7 by Ski Magazine in best terrain park category. Ranked No. 3 best pipe by Transworld, No. 7 best park by Ski Magazine, and No. 9 best snow by Ski Magazine and No. 10 best lodging.

Web site: www.aspensnowmass.com

Steamboat

Scheduled opening date: Nov. 25

Number of lifts: 18

Skiable acres: 2,965; 44 percent expert, 42 percent intermediate and 14 percent beginner

Mountain talk: Another year, another round of accolades. Ranked No. 1 in tree skiing by Skiing Magazine, No.1 best family resort by Skiing Magazine and No. 2 in best snow by Ski Magazine. Mountain improvements have been ongoing for the past four years, with more than $30 million pumped into improvements. This year’s upgrades include the Kids’ Vacation Center, a new ski and snowboard school ticket office and patrol facility.

Web site: www.steamboat.com

Sunlight

Scheduled opening date: Dec. 4

Number of lifts: Three

Skiable acres: 470; 25 percent expert, 55 percent intermediate and 20 percent beginner

Web site: www.sunlightmtn.com 

Telluride

Scheduled opening date: Nov. 26

Number of lifts: 18

Skiable acres: 2,000; 41 percent expert,
36 percent intermediate and 23 percent
beginner

Mountain talk: Ranked No. 2 for scenery by Ski Magazine, No. 7 best overall resort by Skiing Magazine and No. 8 by Freeskier Magazine. Also ranked No. 6 for best dining and weather by Ski Magazine, No. 8 for best apres skiing by Skiing Magazine and No. X for best terrain by Ski Magazine.

Web site: www.tellurideskiresort.com

Vail

Scheduled opening date: Nov. 20

Number of lifts: 33

Skiable acres: 5,289; 53 percent expert, 29 percent intermediate and 18 percent beginner

Mountain talk: The largest ski resort in North America slipped from No. 2 to No. 3 as the best overall resort by Ski Magazine. However, it still was the best of any Colorado resort. The resort has finished in first place 14 of the 23 years the magazine has done the survey. It boasts more than 3,600 acres of bowl skiing/riding with the Back Bowls comprising more than 3,000 acres.

Web site: www.vail.com

Winter Park

Scheduled opening date: Nov. 18

Number of lifts: 24

Skiable acres: 3,078; 55 percent expert, 37 percent intermediate and 8 percent beginner

Mountain talk: Checked in at No. 10 best tree skiing, according to Skiing Magazine. It is celebrating its 70th year of operation and is putting the finishing touches on a $30 million redevelopment of both on mountain and village facilities.

Web site: www.winterparkresort.com

Wolf Creek

Scheduled opening date: Oct. 31

Number of lifts: Seven

Skiable acres: 1,600

Web site: www.wolfcreekski.com

Please share this blog with your fellow ski and boarding buddies…here’s to some fresh pow-pow and carving turns.

Your boarding friend,

Mike

Home Buyer Tax Credit Extension Details

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

Let me know what you think of the information provided in this blog.  Was it helpful?  Are there any other questions you have that weren’t answered here?  Let me know by providing a comment below.

FAQs for the Extended Home Buyer Tax Credit

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit provided by the National Association of Realtors (NAR).

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6,500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6,500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phaseout range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6,500 tax credit?

 Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6,500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6,500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible firsttime homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

I hope you found this information valuable.  Please feel free to leave a comment below.  And as always, I’d love to hear your ideas for my next blog.

Thanks for taking my blog views to over 40,600!!

Tax Consequences of a Short Sale

Short sales and foreclosures are a major part of most real estate markets across the country and many sellers are hearing incorrect information regarding their tax consequences after their home has sold.

In 2007, the federal government passed a law directing the IRS not to count mortgage debt forgiven by a lender as income…but it applies only to purchase money.  The forgiven debt does NOT include debt on a cash-out refinance or 2nd homes.  There is also a dollar limitation of $1 Million for married couples filing separately and $2 Million for joint filers. 

There is also the case of secondary debt and whether that is forgiven or not.  Once the primary lien holder approves a short sale, it is common for the secondary lien holder to accept a small partial payment.  But, many times the secondary lien holder will sell the balance to a collection agency for a small sum…so a homeowner may think that they will be able to apply for a loan in 2-3 years after a short sale but find out that they have a collection agency contacting them seeking payment of that debt.

Short sales are complicated and they have legal and tax consequences for sellers.  It is extremely important that all homeowners considering a short sale have a discussion with an attorney and accountant so that they know exactly what they will be responsible for financially. 

If you are in the Northern Colorado area and would like to discuss options then I’d be happy to share my experience as a Certified Distressed Property Expert and guide you through the process. 

Thanks for the read!  My readers have taken my blog to over 40,500 views!!

Please provide comments on this article and any suggestions for a future article…your input is always appreciated…thank you!

New Home Buyer Tax Credit Information

Today (October 28, 2009), Senate Majority Leader, Harry Reid, reached an agreement with key senators to extend the tax credit.  According to the deal that has been reached, the existing tax credit will be extended to April 30, 2010.  Buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement.  The measure still faces votes in the full Senate and the House before final approval.

First-time home buyers would continue to get an $8,000 credit. 

Also eligible for a tax credit are repeat buyers of primary residences!  Repeat buyers of primary residences would be eligible for a credit of $6,500!  To qualify, current homeowners must have lived in their primary residence for five continuous years.

The credit would be available for individuals making up to $125,000 a year and couples up to $225,000.

There are still some unrelated issues that will delay the announcement for a couple weeks!

Have you been wondering if it was possible to buy your first home or move up to a larger home?

Are you interested in a free consultation to learn what options are available?

Simply send an email to HomeConsultation@MikeMalvey.com

No obligation, no pressure, no hassle!

Free information and options for you to consider.

Mike Malvey, RE/MAX Advanced, 970-420-7235

I work exclusively in Fort Collins, Colorado and the immediate surrounding area.

As always your feedback is greatly appreciated…and thank you for taking the blog reads to over 40,000!!!  That is amazing!

Elk Mating Season at Rocky Mountain National Park

During the September through October months in the Rocky Mountain National Park (RMNP), there is a very distinct sound that can be heard loud and clear and it sounds like a bugle you might hear being played by a marching band at a college football game.  But, in fact, that bugle comes from bull elks during their mating season.  The unique rutting call of bulls can be heard from dusk to dawn and some of the better locations within RMNP to hear and see the bull elks are in Horseshoe Park, Moraine Park and Upper Beaver Meadows.

Not only can you view the bull elks in RMNP but you’ll also find them grazing around the town of Estes Park on golf courses and in front yards.  If you are lucky you might come across a couple bull elks battling for the attention of a female elk.  Typically the dominant bull elk has a full set of antlers and a bellowing bugle.  Occasionally the bull elks will enter into a competitive battle ramming each other with their antlers.  I was able to witness bull elks fighting a couple years ago and it was amazing to see in person…which leads me to a very important topic about watching wildlife…etiquette.

Elk gather in the open meadows and are easily visible when left undisturbed. The RMNP has strict rules to follow during the elk rut and they will not allow people to venture into the park’s meadows between 5 p.m. and 7 a.m. and visitors must stay on roadways and designated trails. Look for postings alerting you to areas that have been closed.

Please remember that wildlife are the natives in this area and we are the visitors! Wildlife are very keen on “personal space.” In other words, they’re happier if you keep your distance. Many people will bring binoculars or a telephoto lens to get a close up view of these majestic creatures. If your presence causes the elk to move away, then you are too close. Within the park, you may be cited for harassment of wildlife if your actions affect the behavior of an animal in any way.  As soon as you park, turn off your car lights and engine. Shut car doors quietly and speak softly. Don’t use headlights or flashlights to illuminate or entice wildlife. 

Please be respectful of the wildlife so everyone can have the same enjoyment when they visit the Park.

 

Do you qualify for the $8,000 first-time home buyer tax credit?

How would you know if you might qualify for the $8,000 first-time home buyer tax credit?  Take a look at this video to learn some of the ins and outs of the tax credit.

If you would like more information about the first time home buyer tax credit then send an email to: TaxCreditExpert@MikeMalvey.com.

If you would like to attend our next first-time home buyer class then visit: www.FortCollinsBuyerWorkshop.com or email BuyerWorkshop@MikeMalvey.com.

The tax credit expires at the end of day on November 30, 2009 (as of August 5, 2009) so you must purchase your home by then!  Don’t miss out on this opportunity to get paid for buying a home!

Fort Collins Brewfest 2009

The 20th annual Colorado Brewers’ Festival in historic downtown Fort Collins will be on June 27 and 28, 2009.  There will be over 50 Colorado beers to enjoy along with all the live music during the festival hours from 11 a.m. to 6 p.m. each day.

Obviously, everyone that will be sampling the beers must be at least 21 years of age.  The admission is $10 for a 2-day pass and $6 for a Sunday only pass.  The beer tokens are $2 and you need beer tokens in order to get your beer samples!  There will be a designated driver program available for non-beer drinkers.

The Colorado Brewers’ Fest is made up solely of Colorado Breweries, including host breweries from Fort Collins: Anheuser-Busch, Big Horn Brewery/CB & Potts, Coopersmith’s Pub & Brewing, New Belgium Brewing Co., Fort Collins Brewery, and Odell’s Brewing

Nothing goes better with beer than great tunes!  Check out these local Colorado bands for the best music show around.  

 

        Saturday, June 27  MUSIC            Sunday, June 28 MUSIC

        11:45am-1:30pm    Gription                11:45am-1:30pm    The Corduroy

        2:00-3:45pm          TBA                           2:00-3:45pm          Pineapple Crackers

        4:15-6:00pm           Roe                          4:15-6:00pm      Caleb Riley Funk Orchestra

 

No Pets Allowed at the festival.  Proceeds from the Colorado Brewers’ Festival help to fund the Lucky Joe’s St. Patrick’s Day Parade, Santa Claus, The Holidays Downtown, free summer concerts, and the 4th of July Downtown. Colorado Brewers’ Festival 2009 was sponsored by: Music Sponsor Bohemian Foundation,  Dellenbach Subaru, Clear Channel Communications, American Eagle, Anheuser-Busch, Flexx Productions, Burt’s Shirts, Coca-Cola and Fort Collins Now.  

VOLUNTEERING: 
The Downtown Business Association accepts volunteers to work 4-hour shifts throughout the event. As a Colorado Brewers’ Festival volunteer, you will receive a special edition T-shirt and complimentary entrance into the festival. Please call (970) 484-6500 to volunteer.

Come down and sample some of Colorado’s best brews all in one place.  From past experience, I would suggest having sunscreen and water as it is typically a hot day and not much relief from the sun or dehydration.  Be smart and assign a designated driver BEFORE you even get to the event. 

Have a great time and maybe I’ll see you down there.  Thanks for reading my blog.

Is Canceled Debt from a Short Sale Taxable Income?

Now that I have earned the Certified Distressed Property Expert (CDPE) designation for my comprehensive knowledge of short sales and foreclosures, I feel it is necessary to share how the IRS regards canceled debt.  The information below was copied directly from the IRS website.

Topic 431 – Canceled Debt – Is it Taxable or Not?

In general, if a debt for which you are personally liable is canceled or forgiven, other than as a gift or bequest, you may have to include the canceled amount in gross income. Depending on the circumstances by which your debt was canceled and the nature of any property associated with the debt, the canceled debt may qualify for an exception to resulting in gross income, or the canceled debt may result in gross income but the income may be excluded.

A debt includes any indebtedness for which you are liable or which attaches to property you hold. If property is associated with a debt, a cancellation of all or part of the debt may occur as a result of foreclosure proceedings on the property, repossession of the property, your return of the property to the lender or your abandonment of the property. Regardless of the factors relating to the cancellation, you must report any taxable amount as ordinary income from the cancellation of debt on Form 1040 or Form 1040NR and associated sub-schedules as advised in IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

If a federal government agency or an applicable financial entity cancels or forgives a debt you owe of $600 or more, you should receive a Form 1099-C (PDF), Cancellation of Debt, showing amounts and other information relating to the cancellation. The amount of canceled debt is shown in Box 2 of the form.

Canceled Debts that meet the requirements for any of the following exceptions or exclusions will not be taxable.

Canceled Debt that Qualifies for Exception to Resulting in Gross Income:

1. Amounts specifically excluded from income by law such as gifts or bequests
2. Cancellation of certain qualified student loans
3. Canceled debt that if paid by a cash basis taxpayer is otherwise deductible
4. A qualified purchase price reduction given by a seller

 

Canceled Debt that Qualifies for Exclusion from Gross Income:

1. Cancellation of qualified principal residence indebtedness
2. Debt canceled in a Title 11 bankruptcy case
3. Debt canceled due to insolvency
4. Cancellation of qualified farm indebtedness
5. Cancellation of qualified real property business indebtedness

 

The exclusion for “qualified principal residence indebtedness”, enacted by the 2007 Mortgage Relief Act, now provides additional canceled debt tax relief for many American home owners involved in the mortgage foreclosure crisis currently affecting much of the country. The Act allows taxpayers to exclude up to $2,000,000 of “qualified principal residence indebtedness”.

Generally, if you exclude canceled debt from income under one of the exclusions listed above, you must also reduce your tax attributes (certain credits, losses, and basis of assets) by the amount excluded. You must file Form 982 (PDF), Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to report the exclusion and the corresponding reduction of certain tax attributes.

Refer to Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, for more detailed information regarding; taxability of canceled debt, how to report it, and related exceptions and exclusions. Additional information can also be found in Publication 525, Taxable and Nontaxable Income.

Caution: If you have property that is security for a debt and that property is taken by the lender in full or partial satisfaction of your debt, you will be treated as having sold that property and may have gain or loss as a result. The gain or loss on such a deemed sale of your property is a separate issue from whether any canceled debt also associated with that same property is includable in gross income. See IRS , Sales and Other Dispositions of Assets, for detailed information on reporting gain or loss from repossession, foreclosure or abandonment of property.

I hope you found this information valuable.  As always, you should consult your attorney and/or accountant to see how this would apply to your specific situation.

You can reach me for questions at ShortSaleExpert@MikeMalvey.com.

Thanks for taking my blog views to over 31,000!!  Your comments and feedback are always encouraged and appreciated.

Kiddie Condo Loan Requirements Updated

 With all the recent changes to the lending industry, I wanted to provide an update on the latest FHA requirements for their Kiddie Condo Loan.

Kiddie Condo is simply a loan that included a non-occupying co-borrower, usually a parent helping their college age kids qualify for a home.

In prior years, the occupying borrower did not need to be able to qualify on their own, they just needed to have clean credit or no credit.  Here is what has changed for FHA loans:

1. The occupant needs to have credit, 3 tradelines.  With reported credit, they have to have a 620 credit score.   If they do not have a credit score, they have to have 3 alternate sources of credit with consistent, timely payments for at least the most recent 12 months.  Sources can include:  rent, utilities, cable, cell phone or land phone, insurance payments, etc.  Anything that is paid monthly that can be verified with 12 months of canceled checks and verification of payments from the provider.
2. If they do not have a credit score, they need to have a job and partially qualify on their own.  If they have a credit score of at least 620, then they do not.
3. the property can be any property, not just a condo.
4. This is for FHA only, all properties need to meet the 51% owner occupancy requirement
5. 3.5% is the down payment requirement, no down payment assistance is available when using a non-occupant co-borrower
6. 6% is the maximum seller contribution to go toward closing costs, prepaid items, and rate buydown.  NO portion of this can go toward down payment

 

Conventional options do not exist for this type of borrower. For conventional loans, if the “child” cannot qualify on their own, the parent has to purchase the property as an investment property. Here is what is needed for this:

1. 20% down payment is required
2. 680 minimum fico score, and with this score, rates and fees are very costly
3. ideal credit score is 740 and 25% down for best rates
4. If child is on the loan, they have to meet the same credit score requirements.  The lowest middle score of all borrowers is the qualifying score

Hopefully this information helps provide a more clear picture of the wonderful Kiddie Condo Loan.  It’s truly a remarkable loan especially for parents of CSU students that would like to help their son or daughter begin earning valuable credit and reap the benefits of homeownership.

If you would like more information regarding Kiddie Condos in Fort Collins, be sure to visit www.FortCollinsKiddieCondos.com or email me directly at CSUCondoExpert@MikeMalvey.com and I’ll be happy to answer your questions.

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