Wednesday, August 27, 2008


Everything you wanted to know about the First-Time Home Buyer Tax Credit and was afraid to ask.

Frequently Asked QuestionsAbout the First-Time Home Buyer Tax Credit

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit.
1. Who is eligible to claim the $7,500 tax credit?First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
2. What is the definition of a first-time home buyer?The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
3. What types of homes will qualify for the tax credit?Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
4. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
5. What is "modified adjusted gross income"?Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
7. Can you give me an example of how the partial tax credit is determined?Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625. Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
8. Does the credit amount differ based on tax filing status?No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
9. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
10. I heard that the tax credit is refundable. What does that mean?The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
11. What is the difference between a tax credit and a tax deduction?A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?No. The tax credit cannot be combined with the MRB home buyer program.
13. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?No. You can claim only one.
14. I am not a U.S. citizen. Can I claim the tax credit?Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
15. Does the credit have to be paid back to the government? If so, what are the payback provisions?Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
16. Why must the money be repaid?Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
17. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
18. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
19. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

Tuesday, August 26, 2008


Congratulations to the City of Crestview and local politicians in support of this great opportunity to the City of Crestview. This opportunity and the others planned in the Crestview area should make the City of Crestview a great place to live, work, and play.

Crestview banking on FAMU fueling economy
By KYLE WRIGHT Florida Freedom Newspapers

CRESTVIEW — Scholars and politicians alike say a Florida A&M University pharmacy school would pump millions of dollars into the local economy. Rick Harper, director of the Haas Center for Business Development at the University of West Florida, says the proposed school in downtown Crestview would have an immediate direct impact of $3 million to $6 million per year in faculty and student spending. Harper based his estimate on the projected initial enrollment of 50 students served by about seven faculty members. State Sen. Durell Peaden, who led the effort to secure state funding for the first phase, expects the project eventually would pump hundreds of millions of dollars into the local economy. Analysts project new medical schools at Florida State University and the University of Central Florida to create an economic impact of more than $1 billion during the respective schools’ first 10 years. Peaden thinks a local pharmacy school could be worth about half that amount. “It’s worth more than anything else we could bring to Crestview,” he said. “It’ll be worth at minimum a couple of hundred million dollars, and as it develops, it will get even higher.” Crestview Mayor David Cadle emphasized the city would not get stuck with the bill if the project encounters a funding shortfall. FAMU officials estimate the facility will cost $10.2 million. The state has allocated $2.5 million for the project. FAMU officials hope to secure additional state funding in future years. “There will be no city liability whatsoever for the final cost of the renovation” of the Alatex building, the likely site for the proposed school, Cadle said. “The city will not be committing any money to the project. It will be totally through the state.”

Monday, August 25, 2008


s I have mentioned before, Eglin AFB and the surrounding areas are taking on many initiatives to maximize the potential of this area for the military and making it a strategic area for Training, Testing, and Operational programs. The area gives the military something not many other places can offer to all services. Joint operations are a must in this budgetary climate and Eglin and the surrounding bases are ahead of others in this area using the land, air, and sea assets in this area.

Department of Defense proposes restructuring of airspace
Growing military presence in Northwest Florida cited as reason for overhaul
By PAT KELLY Florida Freedom Newspapers

PANAMA CITY — The Department of Defense is working with civilian aviation counterparts to restructure the airspace over Northwest Florida for the first time since World War II, an aviation technical advisor told the Airport Authority. Mike “Pappy” Penland, with Eglin Air Force Base’s plans and programs of the Air Armament Center, said an increase in air traffic over a region he called a “national treasure” vital to national security has prompted the review. Also playing a role is the anticipated addition of aircraft and training because of base realignment and closure. “Everybody realizes that this piece of airspace is very complex,” he said. The new model, which will be the end result of a two-year initiative, could serve as an archetype for similar efforts nationwide to minimize congestion in areas of high growth, he said. More military personnel and air weapons systems are coming to the area, including 113 of the new F-35 multi-role fighter aircraft at Eglin, Penland said. F-35 flights are likely to affect the flow of traffic in and out of civilian airports. There also will be increased training flights of the F-22 fighter, which needs a bigger block of airspace than the older F-15, and the turboprop T-6, used for basic navigator training. “It’s a big domino effect” that will affect airspace from Tallahassee to the Mississippi-Alabama border, Penland said. Flights over Eglin airspace alone, not counting operations over water, are expected to rise from 192,000 to 427,000 by 2014. The economic impact in the area is one of the chief concerns of the military and one of the driving forces behind the study, Penland said. Reaching out to their civilian equivalents is only the first part of the Defense Department process, Penland said. The course of action also will include working with university research centers to develop computer models of airspace plans. Usually, the department works with the Federal Aviation Administration, which then consults with civilian authorities, Penland said. The new approach “tries to get everybody together in a coordinated manner,” he said. As a general rule, the FAA “owns” the airspace, and the Defense Department manages the airspace the FAA gives it, Penland said. Goals will be determined by an executive steering committee composed of military flag officers, with the rank of general or above, and civilian flag officer-type equivalents from the governor’s office and other state economic development and aviation groups. There also will be a workinggroup level of airport directors and other experts. Initial plans call for a finished product by December 2010, Penland said.

Sunday, August 24, 2008


It just get better and better for the local area. With more flights coming in to the Okaloosa Regional Airport and with the Military and many defense contractor relying so heavily; we should be ready for many folks migrating to our beautiful area. ARE WE READY FOR THEM?

Airport consultant: Okaloosa poised to succeed
OKALOOSA ISLAND — Aviation expert Mike Boyd told about 120 business and community leaders Friday that the price of a plane ticket will continue to climb. But despite multiple challenges to the industry, Okaloosa Regional Airport can succeed, he said. Boyd, who heads aviation consulting firm The Boyd Group in Colorado, made his presentation at the Emerald Coast Conference Center. “Airline service is like the Internet — without it, you don’t grow,” he said. “The real measure of air service … is connectivity with the rest of the world … They’re the ones that come here and spend money.” Fewer nonstops and using the huband-spoke airport system is what’s ahead for America, Boyd said. Attendee Martin Owen, who handles marketing for Jay Odom’s Crystal Beach Development, worked in the travel business for 30 years. “I came away with the information that Okaloosa Regional is wellplaced to have a successful future in a time when the airline industry has to reassess everything it’s doing,” he said. “From a local business point of view, it’s a concrete positive for the future.” Along with the rest of America’s economy, airlines are deeply affected by the cost of oil. “When oil is up 30 percent … you can’t fly the same routes,” Boyd said. “Most seats right now are ‘under cost’ … but when airlines can raise fares, you can call your broker in Zurich to be able to afford a ticket. This is not a cycle … you’re not going to see the low fares we had three, four, five years ago.” American Eagle, Continental, Delta, Northwest and US Airways fly out of Okaloosa Regional with connections to Atlanta, Charlotte, Dallas, Houston and Memphis. Boyd touted Dallas for its developing connections to Asia and South America. Low-cost success story Southwest Airlines is a name on many airports’ wish lists. Boyd called Southwest “a potential possibility on paper” for Okaloosa Regional. “They’re using ‘hedged’ fuel (bought cheaper in advance) so they’re OK right now,” he added. “They’ll be cutting flights and capacity this fall.” Airports should be “complementary, not competitive,” Boyd asserted, but he did provide the following numbers on average fares for last year: ¿ Pensacola $206. ¿ Okaloosa Regional $256. ¿ Panama City $300. “It’s not about air fares and cheap seats, it’s about economic growth,” Boyd insisted. “If you’re going to make a connection, do it out of here.” Daily News Business Editor Thomas J. Monigan can be reached at 863-1111, Ext. 1438.

Saturday, August 16, 2008


Mossy Head Florida at the Interstate 10/Highway 285 Interchange is beginning to take shape for the future. With this park, the new elementary school, and the golf course under construction, it will sure to be a future growth spot. It is strategically located within 20 minutes to Crestview, Niceville, and Definiak Springs. Mossy Head also features an Industrial Park, which has been designated a "Florida Enterprise Zone".

Mossy Head Park to Open
8/13/2008 Public invited to August 18 opening, 10:00 a.m.
For Immediate ReleaseAugust 13, 2008

Mossy Head, Fla – The first public park in Mossy Head is scheduled to open Monday, August 18. District 3 Commissioner Larry Jones announced that the park will open with a ribbon cutting ceremony at 10:00 a.m. The public is invited and encouraged to attend. The park sits next to the new Mossy Head Elementary School, which will open the same day. The park is located on Highway 90 in Mossy Head about one mile east of State Road 285. The new 3-acre park is comprised of a walking trail, playground, and picnic pavilions. One of the pavilions is specifically designed to be handicap accessible. Walton County construction crews will add a splash pad within the next few weeks. The park also has drinking fountains and restroom facilities. The $250,000 park was mostly funded with grants from the Florida Department of Environmental Protection. The new park will also serve future Mossy Head residents of a new development overlooking an 18-hole golf course now under construction less than a few hundred yards away. The park can be expanded in the future, since it rests on 20 acres of undeveloped land which joins neighboring school property. “I’m proud to see this public park be constructed in Mossy Head,” says Commissioner Jones. “I look forward to those in our community walking the new trail, using the new playground equipment and enjoying all of the park's amenities. I hope everyone will join us in celebrating the park’s opening on August 18.”

Thursday, August 14, 2008


As you can see below, the Bob Sikes Airport is off and running. Having attend the announcement in person, it was very exciting to hear some of the initiatives the Airport has planned and the additional impact it will have on the economic growth of the Crestview area. To learn more about the Crestview Industrial Airpark, you can visit

Emerald Coast Aviation gets FBO job at Bob Sikes Airport
If the contract is finalized, the firm will replace Sunshine Aero
By BRIAN HUGHES Florida Freedom Newspapers

CRESTVIEW — After 28 years under Sunshine Aero Industries, Bob Sikes Airport has a new fixed-base operator. A selection committee heard presentations from Sunshine Aero and Emerald Coast Aviation on Aug. 6. After deliberating several days, the committee recommended to Okaloosa County Airports Director Greg Donovan on Monday that the contract be awarded to Emerald Coast Aviation, the fixedbase operator at DeFuniak Springs Municipal Airport. “We have many opportunities at Bob Sikes Airport and we need a company that will grow with us,” Donovan said. “Emerald Coast Aviation impressed us with their focus on customer service. “The services they are willing to provide, in the selection committee’s opinion, are a very good fit for the future of Bob Sikes Airport in that they see services that are not currently there,” Donovan said. “Somebody had to have a vision in combining these services. “Another thing that I thought Emerald Coast has insight to is bringing back the military fueling concession,” he added. Donovan praised Emerald Coast’s marketing proposal for the airport, which included investing $20,000 a year. Donovan said his office is negotiating the details of a 30-year lease the county proposes to offer Emerald Coast Aviation. He plans to present it to county commissioners Sept. 2. If approved, Emerald Coast Aviation will take over airport operations Jan. 2. Donovan acknowledged that the decision to choose Emerald Coast Aviation was a major disappointment to Robert Keller, president of Sunshine Aero. “We will be offering to facilitate building a new facility for them,” Donovan said. “Sunshine Aero’s military testing company is very important to the airport and to the area. We want to see them succeed,” Donovan said. “We want to see a smooth transition to allow him a sublease and a transition until he can build his own facilities,” he added. “Mr. Keller ultimately has to make those decisions on his own. We will encourage him to keep his operations in Crestview because he’s very important to us.” Introducing a new fixed base operator in uncertain financial times is a challenge, Donovan added. “We’re taking a bit of a risk with anybody that we’d be partnering with in a contract like this, but Emerald Coast has a very good conscientiousness in not just marketing, but in growing with us,” he said.

Thursday, August 7, 2008

Florida A&M University Very Positive with Pharmacy School in Crestview

City of Crestview making major strides to welcome FAMU Pharmacy School to City.

FAMU answers questions about pharmacy school
Crestview City Council likely will discuss the issue at its meeting Monday, official says
By KYLE WRIGHT Florida Freedom Newspapers

CRESTVIEW — Florida A&M University would like full ownership of the Alatex building if it opens a pharmacy school here. And the university doesn’t anticipate parking problems in the downtown area. FAMU provided those responses, along with the answers to 17 other questions, in its reply to the city of Crestview’s list of questions regarding the proposed pharmacy school. The letter is signed by Tola Thompson, FAMU’s director of governmental relations. Michael Wing, the city’s administrative services director, said the responses likely will be a topic at the next City Council meeting Monday. Among the noteworthy answers are: FAMU would like to receive full ownership of the building where the school is located, presumably the Alatex building downtown. “This will be necessary for the university to qualify for state funds for owning and operating the building,” the letter reads. The school says an outright purchase or lease would “complicate” funding for building operations and maintenance. The school expects the building to retain its historic character. “The university’s design solution will involve the restoration of the historic aspects of the building while redesigning the building’s interior square footage into modern classrooms, teaching labs and offices,” the letter says. The university does not expect parking to be a problem downtown. “If parking becomes a problem, we would work with the City of Crestview to design a mutually agreeable solution.” he university hopes to begin design work “right away.” Construction would take 18 months. The school also says construction will not begin until funding for the project is guaranteed. The letter says local contractors will be considered for construction and Crestview residents will be considered for staff positions. Mayor David Cadle says FAMU’s responses will move things forward. “I’m happy to see the process is taking shape,” he said. “The answers from FAMU will give our council members an opportunity to proceed with this project. We’re looking forward to seeing the pharmacy school become a reality for downtown Crestview.”

Monday, August 4, 2008


This is some exciting news for this area and new businesses seeking a great place to headquarter their business. As noted in the article, this Airport brings many things, which included the FOB (See below in previous Blog).

Phase II will complete Bob Sikes Airport runway rehabilitation
By BRIAN HUGHES Florida Freedom Newspapers

CRESTVIEW — The refurbishment of the 8,000-foot runway at Bob Sikes Airport will enter its second and final phase today. “We will essentially have a new runway,” said county Airports Director Greg Donovan. The project began last October, with the 4,100-foot restoration in Phase I completed Jan. 4. Anderson Columbia, a Holt-based contractor, won the bid for Phase II. It also performed the first phase of work. Phase I required the entire runway to close for 20 days. The final phase has been planned to assure there will be at least 5,296 feet of runway available during construction, except for a nine-day period in October when 3,100 feet will be operational. Phase II also will include new lighting and signage for the runway, which is the second-longest in the region. The longest is Eglin Air Force Base’s main runway, which is shared with Okaloosa Regional Airport. The $2.8 million project at Bob Sikes calls for a 70-day work program to be done in three stages, beginning at the north end of the runway. The time period could change because of weather. The lighting and signage component, which will run along the entire runway, will proceed at the same time on a 120-day schedule. It will not affect operations, Okaloosa County Airports Project Manager Tracy Stage said. Stage also assured tenants and users, including L-3 Crestview Aerospace, that more runway length could be made available with 48 hours notice.

Saturday, August 2, 2008

New Federal Law Gives first-time buyers $7,500 tax credit.

The government is on the move and seeking opportunities to stimulate home buying. Look likes a great opportunity for many.

WASHINGTON – Aug. 1, 2008 – Tell first-time homebuyers it’s time to commit: A provision of the recently-passed federal housing recovery bill gives first-time buyers an interest-free loan of up to $7,500 in the form of an income tax credit.The credit equals 10 percent of a home’s cost up to $7,500, and applies to any single-family residence (including condos and co-ops) to be used as a buyer’s principal residence. First-time homebuyers, defined as those who have not owned a home for at least three years, will claim the tax credit the first year they file federal taxes and receive the money as a reduction of their federal tax liability. The money must be repaid at the rate of 6.67 percent of the total credit each year for 15 years, essentially making it an interest-free loan. If a home is sold before the 15-year pay-off, the balance of the credit is recaptured at resale. The credit was included in the new law as a way to entice first-time buyers to get off the fence and commit to a purchase.Other provisions: • Income limits: Full credit goes to individuals making $75,000 per year or less ($150,000 for couples). The credit amount phases out for higher incomes. • Effective dates: The new law is retroactive back to April 9, 2008. It terminates on June 30, 2009. • Alternative Minimum Tax: Credit can be used against the AMT and the credit will not throw any individual into AMT territory.To read more information about the tax credit and other provisions of the federal housing rescue plan, visit the National Association of Realtors Web site at: