Huh - money version

[flea]

We learned this weekend, thanks to my FIL, that we're eligible for a first-time homebuyers tax credit of $7500. Which means that, if we elect to take it, we'll pay no taxes for this year, and will receive a check of whatever's left after the taxes are taken out. So, we'd get all our Federal taxes back (like, $3000, maybe) plus a check for anther $4500 or so, in April. The money has to be paid back, at $500 a year, starting two years from the time you take it, and if you sell your house at a profit, you have to pay it all back. If you sell your house at a loss, it gets "forgiven."

I'm not sure how I feel about this; I'm not sure if we'll take it. On the one hand it feels a bit like free money. We could use it to pay down some of the principle on the mortgage, or do some home improvement work. I feel a little strange that we didn't know about this when we bought the house; we're usually up on stuff like this, you know? So, on the other hand, I feel a little suspicious about "free money" from the government.

We also received a substantial gift of money from my in-laws, so that's another responsibility. They are scrupulously fair about giving gifts to their children. In this case, they wanted to celebrate mr. flea's completion of his dissertation, but they also wanted to give a substantial sum for mr. flea's sister, whose marriage is in trouble. The money is a secret from her husband, and is to serve as her emergency funds should things go wrong there. So that casts a little bit of a pall over the gift to us, in my mind. Also not sure what we're going to do with it - so many possibilities. Mortgage, student loans, long-neglected IRAs, college savings, furniture, home improvement. When you start to slice and dice it, even big money suddenly feels not-so-big.

Comments

[richtermom.livejournal.com]

I'm hoping this credit is less than nine years old because I clearly don't remember hearing about it when we bought our home in '99. And that would hugely SUCK to not have gotten something we were -- here's a great word -- entitled to. I figure hey, buying a house is difficult, but it's generally a really good thing for the local economy, neighborhood stability, etc., so yeah, it's in government's interest to support it. I wouldn't feel badly taking it but I'd be scrupulous about getting it paid back, whether it's a separate check sent out or a line debit from your tax refund or whatever.

OTOH, since I'm in EXACTLY the similar situation as your sister, my ears perked up. I haven't even cashed the check because Wisconsin is community property, so I'm not sure what to do about that. I suppose I should get off my duff and contact a local financial advisor. Coincidentally, I've had three friends hit huge financial brick walls in the past month or so: one had a heart attack (at 38?????), one lost his job and NEEDS medical coverage, and someone else is taking a huge onetime hit. I feel evil knowing that I could substantially help all of them and not doing it, but not knowing what's going on at my end is scary.

[casperflea.livejournal.com]

The tax credit is brand new, voted in this spring. It applies to first-time homebuyers buying houses between April 18 2008 and July 1 2009. It's a stimulus measure for the bad housing market, which party is the root of my ambivalence towards it.

I wish you the best in terms of your domestic situation. I would suggest consult a financial advisor, and/or a lawyer. I'm sure it's hard to feel like you could be helping friends, but especially with a child, you need to be able to help yourself.

[richtermom.livejournal.com]

I'm the goddess of procrastination. I just keep hoping everything gets all better and then I can just use the money for, I dunno, COLLEGE for myself, or REFINISHING a couple rooms, or yes, very simple cash donations for my friends. But things only get better for a week or so and then the other shoe drops.

For a guy, he has a lot of shoes.