For the record, I do follow most of the recommendations that follow.  i have never used Worcestershire Sauce on my brisket.  I also make my own rub.  Other than, this is exactly how I make my brisket.

I do want to add, I am a big advocate of finishing my brisket in the oven.  I like to start cooking my brisket in the oven about noon.  I’ll spend all day coaxing the fire along, taking great care to keep the temperature under 250 degrees.  About 10:00 or 11:00pm, I like to bring the meat in and wrap in tightly in foil.  Then I’ll place it in the oven (set at 180 degrees) over night. When I wake up the house smells terrific and lunch is almost ready!

TEXAS STYLE BBQ BEEF BRISKET

This is the mainstay for most BBQ’s down here in Texas.  This is the same way I cook all of my brisket and have done so for years.

What you will need.

1- whole untrimmed brisket (they can be from 10 to 14 pounds) Get a small one if you
don’t have a long time to cook. This recipe also works for brisket flats with a less of a
cooking time

TIP: When selecting a brisket to cook look for a brisket that has nice white fat on it.
Then look for a nice grain to the meat. The grain should have a nice marbeling
of fat spreading thru the meat. The white fat indicates the cow was fed with grain
and not grass fed. I also like to find a brisket that the thin end (the flat) is fairly thick.

¼ cup of Worcestershire sauce
1 ½ to 2 cups of TEXAS BBQ RUB

TIP: The colder the meat is when you get it on the smoker the better your smoke ring will
be. So take the brisket out of the frig and prepare it right away and put it on the
smoker immediately after the rub has been applied. If you wish to let the rub sit on
the brisket for several hours then you need to cover it in foil and place it back in the
frig until you are ready to get it on the pit.

First, I never trim a brisket. You want the fat on the meat while it is smoking. The brisket will have 1 side that is covered with fat and the other side with just a little fat. Start with the fat side and shake Worcestershire sauce on it and rub it with your hands all over the fat side of the brisket (including the sides and ends). Next take a handful of TEXAS BBQ RUB and rub it over the fat side of the brisket right on top of the Worcestershire sauce. Apply the rub fairly thin on the fat side of the brisket.  Remember this piece of meat is big and is going to be cooking for quite a while. Flip the brisket over and repeat the Worcestershire sauce and rub routine on the other side of the brisket. Since this is the side that will cook up on the pit apply about 1½ handfuls of rub on this side. You will notice that the rub has started to turn into a paste. This is what you want to see. If it is not then add a little more Worcestershire sauce. That is it, it is ready to cook.

Use the indirect method of cooking, use a great tasting wood flavor (I use mesquite) and place the brisket, fat side down on the rack in the cooker. Point the thick side of the brisket toward the heat source. Cook as follows:

200 degrees – Cook for a total of 10 to 16 hours
225 degrees – Cook for a total of 9 to 12 hours

The brisket will be done when a food thermometer reads 195 to 200 degrees internal meat temp and is usually done before the above cooking times but you need to cook it long and slow. The longer it cooks the more tender it gets so if you want to take the brisket to an internal meat temp of 205 degrees that is fine.

OK now for the SECRET that will make your brisket as tender as any meat you have ever eaten. About 2/3 of the way through the cooking of the brisket you are going to wrap the brisket in aluminum foil. Double wrap in foil. Tear off about 2 pieces of heavy-duty foil approx. 24 inches to 30 inches long. Take the brisket off of the cooker (don’t poke it with a fork or anything else as you let out great juices) I use heavy rubber gloves to handle all of my meat with. (You can get the gloves on our website and they are a great tool to use when cooking meat. They are only $10 a pair with free shipping. You can order them at www.texasbbqrub.com/shopping.html) The brisket is going to be real hot so be careful. Place the brisket on the first sheet of foil. Fold up the edges of the foil to keep the sauce we are getting ready to add from getting everywhere. Take about ½ of a can of Regular Coke or Dr. Pepper (not the diet stuff) and pour over the brisket (you should still be fat side down). Now wrap it in the first piece of foil, then wrap another piece around that. Place it back on the pit, fat side down again. Finish cooking. When you are ready to take off the pit be real careful as you might tear the foil and the sauce and juices of the meat can get on you and they will be hot. Take the brisket in and let it rest (cool down) approx. 1 to 2 hours. I take my knife and scrape off the fat on the top of the brisket and then cut into ¼ inch pieces against the grain. The fat end of the brisket has more fat than the thin end. With a little practice you will learn how to carve off the fat before slicing.

TIP: Get Some sleep by doing this

Here is a tip that will save you some time at the pit. If you want to catch some sleep you can finish the brisket off in the oven. At the time it is wrapped just put the wrapped brisket in a large pan with about 2 inch sides and place it in the oven at 200 degrees. This will finish off the brisket and give you a chance to get some sleep. As for smoke flavor the brisket will only take on smoke flavor the first 6 to 8 hours so you just need heat to finish the brisket off.

A brisket will lose approx. 30% of its weight during cooking. You can figure approx. ½ pound of meat per person. And the leftovers (I hope you have some) are even better the day after you cook. Make a brisket sandwich with cold brisket or heat it back up by wrapping it in foil and heating it at a low temperature.

This past week I received a letter from my Congressman, Soloman Ortiz. In his letter he agreed that the Tax credit for First Time Homebuyers was important. He went on though to tell me that although it’s important, it’s not an issue he is going to get involved with. In his view it is much more important to work on Health Care Reform.

I will agree that there needs to be some reform to the Health Care System. It is out of control. I have to admit though, It seems irresponsible to me for a Lawmaker to totally distance himself fram any other subject just to Socialize Medicine in the United States!

I realized this is an important subject. I also realize it’s importance to Congressman Ortiz. Perhaps if Mr. Ortiz is no longer able to focus on more than one issue at a time we shouldn’t elect him to a 15th term

http://www.corpuschristimarina.com/?fuseaction=main.view&page=3209

–Lisa

10 Mistakes First-Time Home Buyers Make

By Lisa Scherzer, SmartMoney.com

Apr 10th, 2009

The declining home values that are plaguing homeowners are just one of the factors creating an opportunity for prospective home buyers.

Standard & Poor’s latest Case-Shiller index, which tracks home prices across 20 major U.S. cities, reported that values dropped 19% in January from a year earlier.

Those depressed values, combined with near-record-low mortgage rates and government incentives (an $8,000 first-time home buyers’ tax credit included in the stimulus bill), are luring more first-time home buyers into the market. Indeed, a recent Century 21 Real Estate survey found that more than three-quarters (78%) of potential first-time home buyers say now is a good time to buy.

If you agree, be aware that buying a home comes with plenty of potential missteps. Here are 10 all-too-common mistakes first-timers make.

1. Not knowing how much house you can afford.

Many novice home buyers spend a lot of time researching homes – comparing kitchen layouts and backyard square footage – but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get preapproved for a mortgage, says Claire Clark, senior vice president of business development at Prudential California Realty. Without first figuring out how much house you can afford, you risk falling in love with one you can’t.

2. Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly, says Jay Michael, partner at Estate Property Group, a Chicago real estate brokerage, so you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home.

3. Letting your true feelings show.

No matter how much you’ve fallen in love with a house, don’t let the seller’s agent in on it. Otherwise, they will gain the upper hand in negotiations.

4. Failing to find a good buyer’s agent.

Landing a mortgage is tough these days. So buyers should rely heavily on knowledgeable agents to help them get their finances in order, says Michael. After all, buyer’s agents have a fiduciary responsibility to the buyer exclusively — and should be looking out for their best interests. Start your search at the National Association of Exclusive Buyer Agents, a nonprofit representing buyers. Or consider using an agent recommended by a relative or friend. Interview each candidate about their experience, if they’ve worked with first-time buyers before and what kind of service you’ll get from them.

5. Underestimating the costs of owning a home.

Whether it’s a rusty pipe or a leaky roof, things go wrong and need to be fixed. Many home buyers don’t anticipate the additional costs for repair and maintenance, or for an increase in utility costs, says Erin Baehr, CFP and president of Baehr Family Financial. Consider the age of your new home and how well it’s been treated by the previous owners in your budget. Be prepared to set aside a small percentage (1% at most) of the home’s purchase price annually for repairs and upkeep.

6. Failing to budget for property taxes.

Property taxes – and the likelihood that they’ll climb over the course of your time in the house – should be factored into any home-buying budget, says Baehr. To get an idea of how much you’ll be paying, call the local assessor’s office or talk to people in the neighborhood.

7. Assuming your first offer will get accepted.

As home prices get even more affordable, competition is bound to heat up. “You can’t assume you’ll walk in there, make the offer and get it,” says Clark. Try not to get discouraged if you lose out on the first – or second – house you make an offer on.

8. Skipping the inspection.

Before signing anything, hire a professional inspector, says Justin Lopatin, a mortgage planner with American Street Mortgage Company. The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated. Lopatin advises buyers to find and hire their own inspector – independently of the realtor – to ensure there’s no conflict of interest. (You can find inspection companies in the phone book, or by doing a simple web search with your zip code.)

9. Doing too much too fast.

Some buyers want to make the house their own right away, says Baehr. They overextend themselves on credit to do so, and assume the improvement will pay for itself by increasing the home’s value. But that’s not always the case – especially in today’s market. Instead, buyers need to exhibit patience and make changes over time.

10. Failing to include a contingency clause in the contract.

A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in under the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house, says Lopatin.

]]> http://teamklemm.wordpress.com/2009/04/14/10-mistakes-first-time-home-buyers-make/feed/ 0 TeamKlemm http://teamklemm.wordpress.com/2009/03/11/4bsoflutely/ http://teamklemm.wordpress.com/2009/03/11/4bsoflutely/#comments Wed, 11 Mar 2009 18:27:53 +0000 TeamKlemm http://teamklemm.wordpress.com/?p=996 ]]> OK, this has nothing to do with Brisket or Real Estate, but I thought I’d post this anyway.

I have, along with 3 other professional flutists, put together a Flute Quartet.  The quartet is called:

We recently recorded a few pieces to use as a demo.  We’ve posted the demos on our website (www.4bsoflutely.com).  Please take a look and let us know what you think.

Keep us in mind for wedding, parties or any get-together where you might want some live music!!

-Paul

This is not your Moms ordinary Meat Loaf- Cooked in the pit and just plain delicious (you can also do it in the oven)

I have always wanted to smoke a meat loaf so this last weekend at a cook-off I decided to do just that. And for all of those that tasted the meat loaf they just could not believe the flavor they enjoyed. So I thought this would be a great idea for a Super Bowl party cause it is simple to cook and if the weather is bad just cook it in the oven and it will be just about as good.

What you will need:

3 pounds of your favorite ground beef. (I used beef chuck)

1 medium onion, minced

1 medium bell pepper, minced

1 small jalapeno pepper, minced (optional)

6 eggs

1½ stacks of Ritz crackers

½ cup of grated Parmesan cheese (I used the parmesan and Romano cheese mixture)

1/3 cup of Texas BBQ Rub

¼ cup of Worcestershire sauce

½ cup of your favorite BBQ sauce (I used Texas’ Own BBQ Sauce-Original)

¼ cup of liquid smoke if you are doing this in the oven

1 large foil loaf pan or pan approx 10x5x4

In a large bowl mix all the ingredients. It is best to use your hands for this, as a spoon just does not work as well. If you are going to cook this in the oven add the liquid smoke to the mixture, if you are going to cook on the pit leave out the liquid smoke. Spread evenly in the foil pan.

Pit cooking – I like to cut about 6 slits in the side of the aluminum pan before I place the meat loaf on the pit. Cut them about half way up the sides of the pan. This will allow some smoke to enter the meat and will also allow for some of the meats juices to escape so the meat loaf is not as full of grease. Cook uncovered for about 2 hours at 225 degrees on the pit. Remove from the pit and pour the BBQ sauce on top of the meatloaf and return to the pit for about 30 more minutes. Cook to an internal temperature of 175 degrees. The meatloaf should be a bit firm.

The measure, backed by President Barack Obama, is the most controversial part of a broader housing package that had been expected to pass the House this week.

It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill it.

This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes.

But banks want to go much further, restricting the bill only to subprime or other exotic loans.

Centrist House Democrats who have been working closely with the financial services industry to scale back the bill balked at supporting it on Thursday after a news report suggested that Sen. Dick Durbin, D-Ill., the lead sponsor of the bankruptcy measure in the Senate, was willing to limit it only to subprime mortgages. The Senate is expected to take up the legislation within two weeks.

In the House, Rep. Ellen Tauscher, D-Calif., the head of the business-minded New Democrat Coalition, raised concerns during the private session that the measure omitted help for homeowners who aren’t staring at bankruptcy but are buckling under burdensome mortgage payments.

House leaders said they had postponed a vote until Tuesday to give Democrats time to meet with Obama’s housing secretary, Shaun Donovan, about how the measure fits with his housing plan.

“There’s an equity question here,” said Rep. Ed Perlmutter, D-Colo., another member of the coalition. “The discussion has got to be, what’s the benefit to the guy next door who is struggling to pay the bills, is paying the bills and isn’t filing for bankruptcy?”

Democratic skeptics are worried “that this could be too hard on the banks,” said Rep. John Conyers, D-Mich., the Judiciary Committee chairman who sponsored the bill.

Consumer advocates and most Democrats regard the measure as crucial to slowing the rapid rate of foreclosures. They say it’s the only way to force mortgage holders — known as loan servicers — to take steps to help homeowners stay in their homes.

The mortgage industry contends, however, that the measure will impose steep and unpredictable costs on its companies, which will be forced to raise fees and interest rates for borrowers. Opponents, including most Republicans, call it the “cram-down.”

Separately, Donovan told senators Thursday that limiting the measure to loans that have already been made should alleviate concerns that lenders would be forced to charge higher interest rates to compensate for the additional risk of a potential “cram-down.”

“The idea is not to have an impact on lenders that are out making loans today,” Donovan said.

In the House, the bankruptcy measure is part of a broader housing plan that also would raise the Federal Deposit Insurance Corporation’s borrowing authority and take other steps to prevent foreclosures. It contains several sweeteners for the mortgage industry designed to prod servicers to allow struggling homeowners to modify or refinance their home loans to bring down their monthly payments.

NAR President Charles McMillan has sent a letter to President Obama, saying that “there is never a good time to propose something that undermines the basic foundation of homeownership.”

McMillan also released the following statement to members this afternoon: “Fellow REALTOR®, You may have seen news reports about President Obama’s Budget Proposal that was released today at 11:30 a.m., Eastern Time.  A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation.  NAR is 100 percent opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.

As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000.  This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values.  If this proposal is enacted it will set off a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines.  A second credit crisis could emerge before the first one is resolved.

As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan.  In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, D.C., decision makers.  Additionally, NAR will be forming a coalition with other groups affected by this proposal. This communication is the first salvo of our response, we will continue to update you as the situation and events warrant.”

Source: NAR

OK this great tasting brisket will do just fine for the people you have coming over to the big game or if you are taking it to a Super Bowl party. Just tell them you smoked it outside so they would have it to enjoy on this day. I’ll keep the secret.

What you will need.

1 – Roasting pan (large enough to hold the brisket and the juices it will produce while cooking). A large aluminum roasting pan you can get at Sam’s Club will do just fine.

1 – brisket (you can cook the brisket flat or a whole brisket) The flat will weight approximately 4 to 6 pounds. A whole untrimmed brisket will weigh 10 to 16 pounds. Try to find one that weights approximately 12

pounds if you can.

1/3 cup of liquid smoke (this will give your brisket some smoke flavor) and keep you out of the cold. You should be able to find this at your local grocery store in the sauces section.

½ cup of worcestershire sauce

2 cups of Texas BBQ Rub Brisket Blend, Original Rub, or Texas Wild Rub. If you don’t have any get it at www.texasbbqrub.com/shopping.html. If you are cooking a brisket flat approximately one cup of one of the Texas BBQ Rubs should be enough.

1 cup of beef broth (optional)

Trimming a whole untrimmed brisket

For a whole untrimmed brisket (this should weight about 12 pounds), you will need to trim the fat down to approximately ¼ inch of fat on the brisket. One side of the brisket will almost be completely covered in fat. That fat will be approximately ½ of an inch thick and this is the fat you should trim down to ¼ of an inch or so. Don’t worry if you trim off too little or too much just leave some of the fat. On the sides of the brisket you will notice fat that runs down the edges of the brisket. Go ahead and cut that down as much as you can. The brisket is ready to be prepared.

Trimming a brisket flat (sometimes called a trimmed brisket in the store)

This is the lean part of the brisket and should have already been trimmed down to what you will need. It will weigh about 4 to 6 pounds. No preparation is needed unless you want to trim down the fat a bit more.

Simple 1-2-3 Preparation

As with any brisket you cook low and slow is the name of the game. So be prepared to cook this brisket over a period of time. My suggestion is to cook the whole brisket (if you can find one) and start it about 9 or 10 o’clock at night and cook it all night so in the morning you have a great tasting meal and lost no sleep. It does not get any easier.

Combine the worcestershire sauce and the liquid smoke. Rub the brisket with the mixture and make sure to cover the entire brisket. If you want to let it sit for an hour that is fine but not necessary.

Preheat the oven to 225 degrees.

Now take Texas BBQ Rub and rub the entire surface of the brisket with a liberal amount of rub. The rub should turn into a pasty substance when it is applied to the brisket. If not add more worcestershire sauce.

Place the rubbed down brisket fat side down in the roasting pan and add to the roasting pan either 1 cup of water or 1 cup of beef broth.

Place the roasting pan in the oven and cook until the internal temperature of the brisket is 195 degrees (or until you can slip a fork into the brisket with very little resistance). For your brisket the cooking time should be approximately 1 hour to 1-½ hours per pound.

Remove the brisket from the oven and let it sit for approximately 30 minutes and then cut across grain. Serve with the juices that were created in the roasting pan.

TIP: The grain of the brisket gets hard to find sometimes after a brisket is cooked. If you wish to mark the brisket for cutting cut off about ½ inch of the corner of the brisket against the grain so it is easy for you to identify where to start slicing.

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

1. What’s this new homebuyer tax incentive for 2009?
The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible?
Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. How does a tax credit work?
Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual’s income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 – $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?
This tax credit is what’s called “refundable” credit. Thus, if the eligible purchaser’s total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference
between $8000 credit amount and the amount of tax liability. ($8000 – $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?
A few examples are provided at the end of this document. There are several steps in this calculation, but most income tax software programs are equipped to make that determination.

6. Is there an income restriction?
Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my “income” determined?
For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year?
Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?
Not always. The credit phases-out between $75,000 – $95,000 for singles and $150,000 – $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual’s income reaches $95,000 (single return) or $170,000 (joint return). For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown: Couple’s income $165,000 Income limit 150,000 Excess income $15,000 The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).
In this example, the disallowed portion of the credit is 75% of $8000, or $6000 ($15,000/$20,000 = 75% x $8000 = $6000) Stated another way, only 25% of the credit amount would be allowed. In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What’s the definition of “principal residence?”
Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as “owner-occupied” housing. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property?
Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property?
In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit?
NO. There is no repayment for 2009 tax credits.

14. Do 2008 purchasers still have to repay their tax credit?
YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return. Some Practical Questions

15. How do I apply for the credit?
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.

16. So I can’t use the credit amount as part of my downpayment?
No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

17. So there’s no way to get any cash flow benefits before I file my tax return?
Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments. Some “Real World” Examples

18. What if I purchase later this year but can’t get to settlement before December 1?
The credit is available for purchases before December 1, 2009. A home is considered as “purchased” when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before December 1, 2009 for purchases to be eligible for the credit.

19. I haven’t even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?
You’ll have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009. They actually have three filing options.
If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15.
They can extend their 2008 income-tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but the taxpayer must file for the extension. See www.irs.gov for instructions on how to obtain an extension.)
If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X. (Form 1040X is available at www.irs.gov)
Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.

20. I purchased my home in early 2009 before the stimulus bill was enacted. I claimed a $7500 tax credit on my 2008 return as prior law had permitted. Am I restricted to just a $7500 credit?
No, you would qualify for the $8000 credit. Eligible purchasers who have already claimed the $7500 credit on a 2008 return for a 2009 purchase may file an amended return (IRS Form 1040X) for the 2008 tax year. This amended return will enable them to obtain the additional $500 credit amount.

21. If I claim my 2009 $8000 credit on my 2008 tax return, will I have to repay the credit just as the 2008 credits are repaid?
No. Congress anticipated this confusion and has made specific provision so that there would be no repayment of 2009 credits that are claimed on 2008 returns.

22. I made an eligible purchase of a principal residence in May 2008 and claimed the $7500 credit on my 2008 tax return. My brother, who has never owned a home, wishes to purchase a partial interest in the home this spring and move in. Will he qualify for the $8000 credit, as well?
No. Any purchase of a principal residence (or interest in a principal residence) from a related party such as a sibling, parent, grandparent, aunt or uncle is ineligible for the tax credit. Since you and your brother are related in this way, he cannot qualify for the credit on any portion of the home that he purchases from you, even if he is a first-time homebuyer.

23. I live in the District of Columbia. If I qualify as a first-time homebuyer, can I use both the $5000 DC credit and the $8000 credit?
No; double dipping is not allowed. You would be eligible for only the $8000 credit. This will be an advantage because of the higher credit amount, plus the eligibility requirements for the $8000 credit are somewhat more easily satisfied than the DC credit.

24. I know there is no repayment requirement for the $8000 credit. Will I ever have to repay any of the credit back to the government?
One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. (See below, #24). Note that this same 3-year recapture rule applies, as well, to the $7500 credit available for 2008. This provision is designed as an anti-flipping rule.

25. What if I die or get divorced or my property is ruined in a natural disaster within the 3 years?
The repayment rules are eased for many circumstances. If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or subject to condemnation by eminent domain by an authorized agency) within the first three years.

26. I have a home under construction. Am I eligible for the credit?
Yes, so long as you actually occupy the home before December 1, 2009. WITHHOLDING EXAMPLES: Note: The impact of estimated tax payments would be the same. Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit. Result: Sally’s withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000. Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit. Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 – $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200) Situation 3: Cesar and LuzMaria both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 – $5000). They also qualify for the $8000 first-time homebuyer tax credit. Result: Cesar and LuzMaria have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 – $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.

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