Revisiting: Was the Federal Tax Credit Extended?

Just so that we are all clear…yes and no…
YES: Service members who were on official extended duty outside of the United States for at least 90 days between January 1, 2009 and May 1, 2010, may qualify for a 1-year extension.

NO: to all others. If you have read about an extension, it was most likely the recently introduced bill to extend the present home-buyer tax credit closing deadline to Sept. 30. The measure, sponsored by Senate Majority Leader Harry Reid, D-Nev, and Senators Johnny Isakson, R-Ga, and Chris Dodd, D-Conn, was offered as an amendment to H.R. 4213, a tax extension bill now in the Senate.

The National Association of Realtors (NAR) estimates the number of home buyers who have qualified for the tax credit and met the contract deadline of April 30, but who would not be able to close their transaction by the June 30 deadline, could go as high as 180,000. Realtors® have reported as many as one-third of qualified applicants have been notified by lenders that their mortgages will not close before June 30 due to the sheer volume of applications in the pipeline.

“As the leading advocate for homeownership and housing issues, NAR commends these Senators for their attentiveness and sensitivity to thousands of qualified home purchasers, who through no fault of their own, are not able to meet the closing deadline of June 30 for the homebuyer tax credit. Now we urge the Senate and the House to act quickly to pass this legislation and ease the minds and pocketbooks of these homebuyers,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Golder said she also wanted to make this clear: “This amendment does not extend the deadline for home buyers to qualify for the tax credit; it extends the deadline for closing the transaction, from June 30 to Sept.30. Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs.”

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IT CAN’T HAPPEN TO ME: A BRIEF DISCUSSION OF BANKRUPTCY–Part II

© 2010 Andrew J. Maxwell

Part II: Definitions and Important Concepts for a Person Filing Bankruptcy. There are three basic bankruptcy alternatives for most people or businesses…

Briefly stated, and greatly over simplified, a Chapter 7 is intended to be an expedited case in which a ‘snapshot’ of the debtor’s financial condition at the time of filing the case is set forth. All of a debtor’s assets and liabilities are disclosed as of the date of filing and those are evaluated by a trustee who seeks to determine if there is any non-exempt property that could be sold or ‘liquidated’ to produce a fund to pay creditors. Unlike a Chapter 13 or Chapter 11 case, in the usual case the debtor’s future earnings are not included in a Chapter 7 bankruptcy case.

In a Chapter 13 case, the debtor similarly discloses all his or her assets and liabilities, but the emphasis is less on the value of the assets than on the future earnings stream as a way to repay debts in whole or in part over a period of time, generally between three and five years. Similarly, in a Chapter 11 case, the emphasis is on the future earnings stream to repay debts and, in the case of a business, the financial viability of the person or entity in the bankruptcy case.

Important concepts for a person considering filing bankruptcy are the automatic stay, discharge of debt, and exemptions to protect property. The automatic stay applies in both consumer and business bankruptcy cases in each of Chapters 7, 11 and 13. The automatic stay becomes effective immediately upon the commencement of a voluntary bankruptcy case and remains in effect until it is modified by an order entered by the bankruptcy court, providing some ‘breathing room’ for the debtor to try to resolve a financial situation. The discharge of debt is the goal for most people filing a bankruptcy case. If some statutory exception doesn’t apply (child support obligations, most taxes, and most student loan obligations, for example) or the court does not rule that the person is not entitled to a discharge, then debts included in a bankruptcy can be wiped out at the end of the case. The exemptions to protect certain property vary by state and can influence what type of bankruptcy relief might best suit an individual situation. It is important to carefully evaluate which assets might be at risk in a bankruptcy case and which assets would likely be protected by an exemption.

This brief article probably raises as many questions as it answers, but bankruptcy is a complicated law, even for lawyers. So, if you find yourself or know someone in or near the Pigs Fly Department, talk to a lawyer who is experienced in and knowledgeable about bankruptcy law before taking any action. I might add, have that talk sooner rather than later.

Andrew J. Maxwell concentrates his practice in bankruptcy, restructuring, reorganization and related areas of law, in regard to individuals and businesses. Mr. Maxwell has been a practicing attorney in Chicago for over thirty years, for more than twenty-five years has been a member of the panel of standing trustees maintained by the Office of the United States Trustee in the Northern District of Illinois, and has administered literally thousands of cases, including some of the largest liquidations in Chicago. He can be contacted at ajmaxwell@maxwellandpotts.com or (312)368-1138. His firm’s website is a work in progress.

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Through the Eyes of a Buyer Agent

Steve Breinling, a long time buyer broker talks about the care, analysis, information filtering, and understanding that goes into being a successful buyer broker.

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A New “Green” Trend: Raising Chickens in the Gap

We went to a neighborhood grill party and came home with fresh chicken eggs and wow! That is certainly worth a blog post! And the eggs…Wow!

So here is the house: does it look like you would find seven chickens here? Following this path you will find seven chickens in a luxury triplex condo chicken coop and roost…It has to be luxury, it is in the Gap; an historic district of Calumet-Giles-Prairie between 3100 and 3500 south in Chicago. The chicken house structure is 8’h x 5’w x 3’d with a roost in the loft and the coops made of plastic crates in on the third floor.

The seven “girls” all have names [Zina, Tina, Mina, Dina, Tania, Brunia, Vranya,] and distinctive eggs according to Ted Washington, our chicken lord. These chickens are “rescue” chickens purchased for about $8 each. The girls are the chicks that people buy on Easter or just buy as cute pets then decide that they are no longer wanted. Together they yield about six eggs a day (delicious eggs).

When you find out that your city neighbor is raising chickens and that he got the idea from another neighbor across the street that has five chickens there are so many questions:

Why?
Ted pulls an egg from the coop—that’s what makes it worthwhile. It is the taste. It is really fresh. Once you eat these, you know the difference. We have cut down on garbage by 80%. All of our scraps go to the chickens: veggies, bread, corn, fruit—they do not like carrots and potatoes. And the “chicken fertilizer” is great for the garden. I am supplying eight gardens with fertilizer.” (Yes, I put in my order for chicken fertilizer!)

How much time does this take?
Two hours per week. I check the food twice a day. I clean… do a deep clean once a week where I take them out and wash down the cage. I make it easy: I have a feeder, automatic water connected to the garden hose. I have a hole cut in the bottom (level) so I can just push the trash down the hold and slide out the tray on the bottom. It is on wheels so I can move it and clean behind it.

The big question: how much does it cost?
The initial investment was about $300. It [the structure] is made of recycled materials: stainless steel trays, shower panels on the floors, milk crates for the coops, there are ceramic heaters and feeders and an automatic waterer. The disposables are: hay, sawdust and feed that comes to about $50 every three months.

Ted has built eight chicken coops: his own and the others for friends. Ted started this project last summer when encouraged by a friend he decided to raise chickens. He got his first rescue chickens last November. He has learned through research, asking others and by trial and error. Ted is very much a sustainable living advocate; he is researching wind technology, plans rain barrels for watering the garden and is interested in alternative power for autos. When Ted is not working his day job he is detailing cars. —Michelle

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Today’s Most Critical Selling Factor

Price Right: Today’s Most Critical Selling Factor
Steve Breinling talks about the shift to price, price and price from location, location , location!

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Cook County Property Tax Primer: 2009 City of Chicago Reassessment Introduction

You cannot discuss real estate without considering taxes. So a “primer” is what we need now:

Each year the Cook County Assessor reassesses one-third of the nearly 1.8 million parcels in Cook County. For 2009, the eight townships (“City Townships”) located within the boundaries of the City of Chicago will be reassessed starting this spring. These townships are Hyde Park, Jefferson, Lake, Lake View, North, Rogers Park, South, and West.
The reassessment comes at a time of great uncertainty. As everyone is aware, the U.S. economy has been in recession since December 2007 and it appears that the economic climate and consumer confidence will not improve anytime soon. Sales of all types of properties were significantly reduced or virtually non-existent in 2008. Price appreciation was negative throughout 2008 according to Moody’s/REAL repeat sales index with apartment properties losing 13.6% in value, industrial properties losing 13.9% in value, office properties losing 13.5% in value, and retail properties losing 8.5% in value. Prices are expected to fall further, especially since distressed sales at even steeper discounts are starting to occur.
Even in these tough times, you cannot avoid paying property taxes. However a vigilant property owner can avoid being overtaxed and paying more than his fair share of property taxes by protesting his assessment to the Cook County Assessor (“Assessor”) and the Cook County Board of Review (“BOR”).
Primer
The foundation on which the property tax levies are based is the determination of the assessed value (tax base) of all non-exempt property in Cook County. The Assessor places a market value and assessed value (% of market value) on all the property within Cook County on a rotating basis. Upon the filing of a complaint by a property owner or taxpayer (“taxpayer”), the BOR will review the proposed assessment of the individual property. For 2009, all property within the City of Chicago will be reassessed. The Assessor’s Office is scheduled to begin its reassessment in the spring of 2009 (taxes payable in 2010). The BOR will open for complaints for the 2009 assessment year in September 2009 and finish in the summer of 2010.
Assessor
After the Assessor has reassessed a particular township, taxpayers in that township will get a notice in the mail informing them of their new assessment Once those notices have been mailed, taxpayers will have a limited amount of time (30 days) to file a complaint with the Assessor’s Office. Please note that for 2009 the assessment levels are changing. Below is a chart which compares the old assessment level to the new assessment level.
2008 2009
Vacant Land 22% 10%
Residential 16% 10%
Apartments 20% 16%
Commercial 38% 25%
Industrial 36% 25%
So for example, a 2008 assessment for an apartment building of $150,000 indicates a market value of $750,000 (150,000/.20). Yet the same assessment in 2009 reflects a market value of $937,500 (150,000/.16), or a 25% increase in market value without regard to any other value changes.
Basis for a Valuation Complaint
A valuation complaint may be based on a number of contentions. The characteristics of a property might be incorrect; there might be a recent purchase that supports a lower market value; or the taxpayer could get an appraisal in support of a lower market value. If the property is income producing (such as an apartment building, strip mall, office building, etc.), the income and expenses may support a lower market value.
Additionally, vacancy can significantly affect a property’s market value and assessment.
Once the appropriate evidence is filed, the Assessor’s Office will determine if it supports a market value reduction. If a taxpayer is not satisfied with the results received from the Assessor, a complaint can be filed with the BOR.
BOR
Similar to the Assessor’s procedures, a taxpayer has a limited window of time in which to file a complaint and then evidence with the BOR. Unlike at the Assessor level, taxpayers or their counsel have a chance to present their case to the commissioners and deputy commissioners at a short oral hearing with the BOR. It should be noted that only taxpayers or their legal counsel may file a complaint with the Board or appear before it. Once the evidence has been filed and/or an oral hearing takes place, the BOR will make its determination.
After the BOR has certified its assessments and the tax base has been determined, the County Clerk determines the tax rates needed to supply various taxing districts with their levies. Then the Collector’s office calculates the tax bills and mails them out to the individual taxpayers.
Conclusion
To sum up, it is important for all property owners to review their Notice of Reassessment when it comes in the mail and then to notify their property tax counsel of the reassessment. It is too late to appeal once a taxpayer receives his tax bill.
Thompson Coburn Fagel Haber’s (“TCFH”) Real Estate Tax Assessment practice covers all types of apartment, commercial, industrial, and retail properties. Our real estate tax assessment appeal practice is based on a contingent fee and our services include representation, evidence compilation, and negotiations with assessment officials at the county level, the Illinois Property Tax Appeal Board, and/or the Circuit Court of Cook County.

Guest Post by David Bass
Attorney Bass practices in the Real Estate Tax Assessment Department of Thompson Coburn Fagel Haber. He handles valuation/assessment appeals before the various Assessor and Boards of Review in Illinois, including the Cook County Assessor and Cook County Board of Review regarding commercial/retail/industrial properties, apartment buildings, and condominium properties.

For more information on property tax assessment appeals, please contact attorney David Bass at (312) 580-2325 or via email at dbass@tcfhlaw.com.
For a print version of this Alert, click here.
Thompson Coburn Fagel Haber
55 East Monroe Street
Chicago Illinois 60603
Phone: 312.346.7500
Fax: 312.580.2201
http://www.tcfhlaw.com

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