California Expected to Cancel Tax on Forgiven Mortgage Debts

California is finally working towards needed State income tax relief for Californians who have received mortgage forgiveness through selling their homes in a short-sale process. The Sacramento Bee published an article on April 6, 2010 outlining this process. It appears that this tax relief could be in place by the April 15th tax filing deadline.

To quote the Sacramento Bee article as provided by CAR:

Relief appears imminent for thousands of Sacramento homeowners hit with state tax bills for mortgage debts forgiven in 2009.

State lawmakers said Monday they plan to cancel the state tax obligations with a vote Thursday.

Shannon Murphy, spokeswoman for Assembly Speaker John Pérez, D-Los Angeles, said legislation will go before the Assembly Revenue and Tax Committee today and the Appropriations Committee on Wednesday, and will receive a full vote Thursday.

A similar Senate floor vote planned Thursday would send the bill immediately to Gov. Arnold Schwarzenegger, who has repeatedly stated his support. The new bill is similar to one he vetoed March 25. But this time it omits a part he opposed – financial penalties for businesses that routinely seek state tax refunds. Democrats removed the section despite their contention that some firms “fish” for refunds whether or not they’re owed.

Monday, Schwarzenegger spokesman Mike Naple said the governor “hopes the Legislature fully addresses the concerns raised in previous versions of this bill.”

The new movement means that Californians who got unexpected tax bills of $10,000 or more in recent weeks could soon be off the hook. Most are borrowers who received loan modifications last year or lost their houses in short sales, in which banks accept prices below what they’re owed. In both cases, lenders forgave some of the debts owed them, a process that exposes borrowers afterward to taxes.

“We want to get it done before the (April 15) tax deadline,” said Alicia Trost, spokeswoman for Sen. President Pro Tem Darrell Steinberg, D-Sacramento. “We don’t want to have people jump through hoops.”

Many across the state have anxiously waited for the state to resolve the issue before the tax filing deadline – or have filed extensions.

Typically the state and federal governments view forgiven home loan debt as additional income and tax it. But both have backed off amid the housing crash. The federal government has suspended taxes on forgiven mortgage debt from 2007 through 2012. California suspended it for the 2007 and 2008 tax years. But disagreements over the business tax refunds stalled a bill extending it to 2009.

The bill being considered this week, Senate Bill 401, would cancel state tax obligations for forgiven mortgage debt through the 2012 tax year. The Assembly planned Monday to rewrite SB 401 from a bill regarding tax shelters to one that aligns much of California’s tax law with that of the IRS. That includes canceling taxes on forgiven mortgage debt and on recipients of federal renewable energy grants.

“We haven’t done a tax- conforming bill for four years, so it’s important to get that done,” Trost said Monday.

This article was provided by CAR as written by Jim Wasserman of  The Sacramento Bee.

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Survey finds Americans prefer Homeownership

A new national survey gauging attitudes toward housing finds that two-thirds of Americans (65 percent) still prefer owning a home, despite the challenging economic environment and the housing downturn. The Fannie Mae National Housing Survey, conducted between December 2009 and January 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

The survey revealed that homeowners and renters alike are taking a more cautious approach to homeownership. Nearly a quarter of renters polled (23 percent) said they will buy a home later than once planned. In addition, Americans with traditional, fixed-rate mortgages with predictable payments are significantly more satisfied than those with other types of mortgages. Respondents cited non-financial reasons such as safety (43 percent) and quality of local schools (33 percent) as driving factors in wanting to own a home, ahead of financial considerations.

A majority of consumers (60 percent) believe that buying a home today is harder than it was for their parents, and nearly seven in 10 (68 percent) think it will be even more difficult for their children. Most respondents (88 percent) also believe that walking away from an underwater mortgage is not acceptable, but those who know someone who has defaulted are more than twice as likely to have seriously considered stopping payments on their mortgage.

More info

This article was provide by CAR.

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Governor Scwartzenegger signs Home Tax Credit Bill

On March 25, 2010 Governor Schwarzenegger signed AB 183 providing $200 million for home buyer tax credits.  The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.
This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).  Buyers also must be at least 18 years old and be unrelated to the seller.  First-time buyers are defined as those who have not owned a home in the past three years.
To learn more about the California Home Buyer Tax Credit, click here.

This Article was provided by CAR. As I am not a tax professional, please confer with your CPA or other tax advisor about how this California tax credit may affect your next home purchase.

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Boy Scouting – Santa Clara Council

I support the Boy Scout Program. I have many wonderful memories of trips with my son’s and their friends on scouting activities. My three son’s are Eagle Scouts. My wife Cathy has served as a Den Mother besides being a major influence in helping our son’s obtain their Eagle Scout awards.Currently I am serving as a Unit Commissioner in the Monterey Council. It is very important to be a BSA Trained Leader if you plan to be a volunteer. I have attended most on the online training as well as leader Specific and Outdoor Training. Check out the Training offered in this article.
The following has been provided by the BSA Santa Clara County Council. For questions about this information, I would refer you to them. This is posted as a community interest article.
Has your Cub Scout decided when and where they want to go to camp?  Registration opens on April 5, 2010!
Cub Day Camp is truly the best part of a Cub Scout’s summer!  Each camp is 5 days long and filled with activities including games, archery, BB guns, sports, and Scout skills. 
To sign up your Cub Scout please click HERE.  Don’t wait either, get the early registration discount if you sign up between now and April 15.
Don’t miss Northern California’s biggest event this year, the NorCal Jamboree on April 14, 15, 16.
Program Volunteers Needed

  • Arts & crafts 2 more each for Friday, Saturday morning and Sunday
  • Raingutter Regatta- 3 people for Fri, Sat and Sun–I have NO confirmed volunteers
  • Gold Panning Need at least one to cover all Friday and Saturday morning
  • Mountain Boarding (snowboarding on dirt) Youth needed
  • BMX – 10 for Fri/Sat/Sun; 4 for construction Wed/Thurs
  • Disability Awareness Challenge – 2 more needed Fri/Sat/Sun
  • Stage Managers – 1 needed for Park Bandstand Fri/Sat/Sun
  • Scout’s Own –  9-11 needed Sunday morning only
  • Friday night Campfire – (acts needed)
  • Memorabilia Security (minimum needed)Friday – 6 ;Saturday – 10 ;Sunday – 6
  • Geocaching  – Fri/Sat/Sun
  • Kim’s Game – 2 Needed Fri/Sat/Sun
  • Action Castle – 2 Needed Fri/Sat/Sun
  • Order of the Arrow –  10 minimum must have people


  • Display Cases
  • two person saws
  • tables
  • folding chairs
  • Scrap Paper

To volunteer, please click HERE.
Click on Program Overview
Click on Volunteer to help out
Put PROGRAM VOLUNTEER and specific activity in your comment line!
Leaders Guide is now online.
Don’t miss out on being a part of our largest Good Turn for Silicon Valley!  Please visit the Good Turn for Silicon Valley web site to view the many service projects available for Scouts to participate in.  As part of celebrating our 100th anniversary, we hope to accomplish more than 100 service projects over the course of this year.  Please take a look at the Web site by clicking HERE.
Are you artisiticand passionate about Scouting?  We are looking for someone to design our 2011 Friends of Scouting patch!  The Patch Design Contest will run from April 2 through April 20 and is open to anyone with a passion for design and art.  We are very fortunate to have the 2011 FOS patch flown in space by Eagle Scout, Gregory Chamitoff, who was also keynote speaker at the 2010 Council Dinner.  Dr. Chamitoff has graciously offered to take the patch design on his mission, which is scheduled to launch July 29, 2010.  It would be good to incorporate the 2011 theme in different ways (for example…”To Bravely go where no Scout has gone before…”).
Here are the contest guidelines:

  • You must incorporate the 2011 theme – A Scout is Brave – in the design
  • The patch should have our council name on it
  •  Design must be within the patch dimensions listed on-line
  • Detail should be minimal as the design will be on a small patch

Please visit us online for more details by clicking HERE.  All finished designs should be sent to Shannon Shaffer at
April 3 – Venturing Leader Specifics Training
April 23-24 – Outdoor Webelos Leader Training
April 23-24 – Outdoor Webelos Leader Training
May 1 – Cub Scout Specifics

We are looking for a volunteer that can help us update our unit locator map.  We need this volunteer to provide JAVA script code to our Webmaster.  We will supply the locations and unit information as it is available by e-mail.  Please contact Victoria Esquivel at or              408.280.2154  408.280.2154    408.280.2154  408.280.2154      408.280.2154  408.280.2154    408.280.2154  408.280.2154        408.280.2154  408.280.2154    408.280.2154  408.280.2154      408.280.2154  408.280.2154    408.280.2154  408.280.2154          408.280.2154  408.280.2154    408.280.2154  408.280.2154      408.280.2154  408.280.2154    408.280.2154  408.280.2154        408.280.2154  408.280.2154    408.280.2154  408.280.2154      408.280.2154  408.280.2154    408.280.2154  408.280.2154 x36 for additional information.
The Boys’ Life television show the action-packed, original series “Scouting for Adventure” – is back on the Outdoor Channel in reruns, Thursdays at 1:00 p.m. Eastern and Saturdays at 7:30 p.m. Eastern.  All-new episodes for season three will kick off this summer coinciding with the 100th Anniversary celebration and the 2010 National Scout Jamboree.
Season three will continue the adventure, taking viewers on spectacular treks to the BSA’s national high adventure bases and giving them an inside peek at “the best, most exciting, fun-filled safest jamboree ever.”

Scout Shop Hours
During the NorCal Jamboree – April 14-16, the Scout Shop will be closing 1 hour earlier, at 5:00 PM.  See you at the Jamboree!

The Historic Merit Badge program is back!
Four vintage merit badges that will count toward rank advancement are being released for the centennial year only, giving Boy Scouts a hands-on opportunity to experience the exciting past of the Boy Scouts of America!  For more information and to view each merit badge, please click HERE.
New Merit Badges coming!
Scout Heritage – April 19
Inventing – June 8
If you have any questions, please contact our Scout Shop at      408.279.2086  408.279.2086    408.279.2086  408.279.2086      408.279.2086  408.279.2086    408.279.2086  408.279.2086        408.279.2086  408.279.2086    408.279.2086  408.279.2086      408.279.2086  408.279.2086    408.279.2086  408.279.2086          408.279.2086  408.279.2086    408.279.2086  408.279.2086      408.279.2086  408.279.2086    408.279.2086  408.279.2086        408.279.2086  408.279.2086    408.279.2086  408.279.2086      408.279.2086  408.279.2086    408.279.2086  408.279.2086 .
Stay in the know about council news by following Jason Stein’s tweets!  Click HERE to log onto his page and press the ‘follow’ link.

Scout Out the Boy Scouts of Santa Clara by joining our own private social network,  Whether you are a new member or returning one, this is the place to stay connected!  Start your own blog, comment on someone else’s blog, join or start discussions, post information about your Eagle project or read about someone else’s, and post and check out upcoming events.  Whatever you decide to do, Scout It Out and don’t forget to get your badge!
Click HERE to join.

If you have Scouter’s in your units who are not receiving our Weekly Scouter Update or Santa Clarion Newsletter, please have them sign up at our council homepage The e-list sign up is located in the lower right corner of the screen.

If you believe that you received this message in error and/or do not wish to receive further emails please click here.


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How to obtain an Amateur Radio (HAM) License

My wife Cathy and I have enjoyed obtaining our Technician Class Amateur Radio (HAM) license. I am KJ6AMZ and Cathy is KJ6AMY. In April we will attempt to obtain our General Class Amateur Radio (HAM) license which will allow us a wider radio experience.

A great way to obtain your Amateur Radio License, many times referred to as HAM Radio, is by visiting the following site:  We attended a  Baers license class and in one Saturday were able to obtain our Technician Class License. After obtaining our license we were mentored by many helpful and friendly local “HAM’s”.

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How to Get the Homebuyer Tax Credit

You’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here’s what you have to do to get your benefit:

  1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract in place by April 30, 2010 with a closing date no later than June 30, 2010.
  2.  Decide whether to: 
  • apply the credit to your 2009 tax return, filed on or before April 15, 2010;
  •  file an amended 2009 return; or, 
  • apply the credit on your 2010 return, filed on or before April 15, 2011.

      3.   Attach documentation of purchase to your return.

When to Apply the Credit

Buyers purchasing in 2010 will have the option to:

  •  Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
  •  File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
  •  Claim the credit on their 2010 tax returns.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

  1. Fill out Form 5405 to determine the amount of your available credit;
  2. Apply the credit when you file your 2009 tax return or file an amended return;
  3. Attach documentation of purchase to your return or amended return.

How do I obtain an IRS Form 5405?

Go to:

How to Apply the Home Buyer Tax Credit to your 2009 Return

To claim the credit as part of your 2009 return, you will need: The standard Form 1040 and Form 5405 for the home buyer tax credit.

  1. First begin Form 1040.
  2. Be sure to take note of your adjusted gross income, which you enter on lines 37 of the form. Form 5405 actually requires you to note your modified adjusted gross income, but that affects few people, so most will just use their adjusted gross income.
  3. When you come to Line 69 you’ll be asked to enter your tax credit amount. To do that, you’ll need to first complete Form 5405. 
  4. Once you complete Form 5405, enter the amount on Line 69, then complete your return.
  5. Attach Form 5405 to your return.

Collecting Your Refund

Any refund for which you qualify will be sent to you.

Determining Your First-Time Buyer Credit Amount: Form 5405

Regardless of whether you’re applying the first-time home buyer tax credit on your 2009 return or your 2010 return, you’ll need to visit the IRS Web site and download  Form 5405: . This form has just six lines and takes only a minute to complete. 

  1. On the first line enter either $8,000 or 10 percent of the home purchase price, whichever is smaller. Since the national median home price is around $175,200 (March 2009), in most cases the $8,000 will be the smaller of the two. In order for 10 percent of the home price to be smaller, the home purchase price would have to be $79,999 or less. 
  2. On the second line enter your adjusted gross income. You will find your gross adjusted income on line 37 of Form 1040, which you submitted when you filed your 2008 return. The tax credit form actually requires you to note your modified adjusted gross income, but that affects few people, so most will just use their adjusted gross income.
  3. If your adjusted gross income is more than $75,000 (individual) or your income is more than $150,000 (joint) you’ll have to complete some additional calculations to determine the credit amount for which you qualify.
    Everyone else will simply enter the tax credit amount on Line 6.

The information in this Blog was condensed from a recent NAR article. Please do not consider this article as income tax counsel and please verify the above information with your CPA or other Tax Advisor.

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Reverse Mortgage used to Purchase a Home

In an actual transaction a client obtained a Reverse Mortgage to complete a home purchase transaction.  Here is the scenario: Senior parents own their home free and clear. The parents would like to stay in their home and be independent through their retirement. They however need some assistance occasionally now and feel they may need more care assistance in the future as they age.

A home in the parents neighborhood came up for sale. There daughter and son-in-law have interest in moving to this home and providing their parents with support. The problem is that the adult children do not have enough equity in their home to make the purchase without increasing their own house payment beyond what they could personally afford.

A solution is possible  through a Reverse Mortgage. In this case the parents obtained a Reverse Mortgage on their home and was able to pull $225,000 cash equity. They still do not have a house payment because of the Reverse Mortgage.  They then purchased the new home with their adult children,using $200,000 of these funds as a down payment on the new home after setting aside $25,000 to complete some home repairs. With the adult childrens remaining equity, after they sold their home, there was no house payment on either home.

The daughter now works part time and has the free time to help her parents. The parents still have no house payments and have the security of family in their neighborhood.

For more information on Reverse Mortgages and helpful links,  go to

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There’s still Time to take advantage of the “Extended Home Buyer Tax Credit”

You don’t have to be a first time home buyer to take advantage of the “Extended Home Buyer Tax Credit”.

You could receive an $6,500 TAX CREDIT if you are CURRENTLY A HOMEOWNER and purchase another owner occupied home between November 7, 2009 and April 30, 2010 that closes escrow by July 1, 2010. You must have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

You could be eligible for an $8,000 TAX CREDIT if you are a FIRST-TIME HOME BUYER and purchase a home between November 7, 2009 and April 30, 2010 that closes escrow by July 1, 2010. You or your spouse must not have owned a home during the three years prior to the purchase.

The purchase price cannot exceed $800,000. Also, single Buyers with incomes that do not exceed $125,000 and married couples with combined incomes up to $225,000 may receive the maximum tax credit. The tax credit will not need to be repaid as long as the home is “owner occupied” for three years or more. If the property is sold during this three-year period, the full amount of the tax credit will be recouped on the sale.

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Ham Radio is Fun and provides Public Service

In June of 2009 my wife Cathy (KJ6AMY) and I (KJ6AMZ) obtained our Amateur Radio License also referred as HAM Radio License. We have enjoyed connecting with other Ham’s in the Morgan Hill, Gilroy, San Martin, Monterey and Hollister areas. We hold a Technician Class license and will be testing for a General Class license in April 2010. I originally obtained my Novice Class License (WN6HXV) when I was 15 years old but later allowed my license to expire. Things have changed technically since my days as a Novice transmitting CW.

Through the use of a local repeater and IRLP I was able to take to my son in Provo, Utah with my YAESU FT-60.

HAM Radio operators, besides being experimenters, provide communication service during emergencies. They work closely with the Red Cross Emergency services.

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What is a Short Sale? Is a Short Sale best for me?

“Short Sales” What is a Short Sale? Who can explain what a Short Sale is? Is a Short Sale best for me?

A short sale in real estate occurs when the outstanding obligations (mortgages, including HELOCS) are greater than the properties value or potential sales price. The owner of the property lists the property for sale with a Realtor of their choice at the market price and the Realtor prepares a request (Short Sale Package) that is sent to the Lender(s) requesting a  reduction in the mortgage(s) balance that will match the sales net. The Realtors commission is paid out of the sales proceeds as well as the unpaid property taxes, Title fees and most of the sales closing costs. In most cases the Seller(s) will not have to contribute any funds towards the closing.

Some things to consider when determining if a short sale is right for you:

1. Contact a Realtor that is experienced in the short sale process.

2. Review this option with your CPA and family Attorney. I always have my clients meet with a CPA and Attorney (with real estate experience) to review whether the short sale process is right for you.

3. The short sale approval process can take 2-5 months depending on the Lender.

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