Governor Edmund G. Brown announced the appointment of Wayne Bell as the commissioner of the California Dept. of Real Estate. Bell, a long-time real estate broker, has been chief counsel and assistant commissioner for legal policy and recovery at the California Dept. of Real Estate since 2006. He was special counsel and director of homeownership at the California Housing Finance Agency from 2003-2006 and deputy secretary and general counsel at the California Business, Transportation and Housing Agency from 1999 to 2003.

C.A.R. supports the governor’s decision to appoint Bell. In April 2011, C.A.R. convened a special committee to meet with nearly a dozen applicants for the position and who sought C.A.R.’s endorsement.  After multiple meetings with the candidates themselves and weeks of internal discussions and review of their qualifications, it was clear that Mr. Bell stood out from the rest.

In addition to his demonstrated qualifications through multiple gubernatorial administrations and regulatory assignments, throughout his tenure with the state of California, Bell also has met with C.A.R.’s Board of Directors.

This position requires Senate confirmation.

Los Angeles Times – San Bernardino County and two of its cities last year created a national stir with a proposal to use eminent domain to seize troubled mortgages and write down debt for homeowners. That debate returns to the county this week, with the first public meeting.

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San Francisco Chronicle – Consumer advocates have complained that U.S. mortgage lenders are getting off easy in a deal to settle charges they wrongfully foreclosed on many homeowners.  Now it turns out the deal is even sweeter for lenders than it appears: Taxpayers will subsidize them for the money they’re ponying up.

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Supervisors Mark Farrell and Scott Weiner have introduced legislation which would enable tenancy in common owners who qualified for the 2012 condominium lottery to bypass the lottery by paying a per unit fee starting at $4,000 and increasing on a sliding scale basis dependent upon the number of years the building has entered the lottery.  The legislation includes tenant protections which provide any tenants in occupancy will receive lifetime leases (note:  this is no better or worse than the current tenant protections under rent control).  In order for the legislation to pass it will require six votes from the Board of Supervisors.  Plan C has been working hard to advise the community, property owners, realtors, attorneys, and other interested citizens of the need to support this legislation.

On January 28^th at 1:00 the legislation will be heard by the Land Use Committee and if it passes committee it may be heard by the full Board of Supervisors as early as February 5th.  It is critical that supporters call and email the supervisors to show their support.  For supervisor contact info, click here:  http://www.plancsf.org/contact-city-hall/ We also urgently need people to come to the hearing and provide public comment.  The Supervisors need to hear stories and see the real people impacted by the current condominium lottery process backlog.  The Tenants Union intends to show up in large numbers and it is imperative we show representation of the parties truly impacted by the condominium lottery backlog which now is approximately 15 years based upon number of entrants.  There is a real possibility that this legislation may finally pass after years of failed efforts, but it requires action and involvement.

I hope that you will pass this onto your friends, and colleagues advising them of the hearing and requesting they (1) call or email the supervisors and (2) make the time to come to City Hall on Monday January 28^th at 1:00 PM.    I have included a link to Plan C’s website which has detailed information regarding the legislation.

For more info about the legislation, click here:  http://www.plancsf.org/2013/01/update-on-proposed-condo-bypass-legislation/

The Internal Revenue Service has announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions.  Taxpayers claiming the optional deduction will complete a significantly simplified form.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

The new simplified option is available starting with the 2013 return most taxpayers file early in 2014.

More info

In an effort to conform state law to a federal law passed last week that extended mortgage debt forgiveness, C.A.R. is sponsoring Senate Bill 30, so that California homeowners on the brink of foreclosure can get much-needed debt relief.

SB 30 (Calderon, D-Montebello) will for one more year exempt the taxation of mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale or loan modification (including any principal reduction).

“We applaud Senator Ron Calderon for acting so quickly on an issue that’s critical to the housing market,” said C.A.R. President Don Faught.  “We urge the California Legislature to also act quickly and pass a measure that will give hope to tens of thousands of California homeowners and provide the vital financial relief they need in order to make important personal financial decisions.”

The previous California exemption lapsed at the end of 2012, so forgiven mortgage debt is considered taxable state income for the time being.  Upon passage of SB 30, the measure will be effective retroactive to Jan. 1, 2013.

More info

Last week, Congress reached an agreement in the “fiscal cliff” negotiations, and President Obama signed the American Taxpayers Relief Act into law last Wednesday.

C.A.R. would like to recognize and thank the tens of thousands of C.A.R. members who worked to successfully maintain the mortgage interest deduction by responding to the Call for Actions and open letter advertisements in the state’s major newspapers.

Here are some housing-related provisions included in the federal law:

• Mortgage Forgiveness Debt Relief Act extended for one year
• The “Pease Limitations” that reduced the value of itemized deductions, including the mortgage interest deduction, are permanently repealed for most taxpayers but will be reinstituted for high income filers.  This provision reduces a taxpayer’s itemized deductions by 3 percent of the amount of his or her adjusted gross income (AGI) that exceeds the threshold amount.  Under the new law, the Pease thresholds are $300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000).  No matter how high a taxpayer’s AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year.
• The restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers.  This provision expired at the end of 2011 but has now been retroactively extended for all of 2012 as well as 2013.
• 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.
• Capital gains rates will remain at 15 percent for those earning less than $400,000 (individual) and $450,000 (joint).   Gains above those income levels will be taxed at 20 percent.  Gains on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 taxpayers filing jointly. 

Washington Post – While they are overseas protecting our country, military personnel often have problems meeting certain financial obligations at home, such as keeping current on their rent or mortgage obligations. Last August, President Obama signed a law that strengthened existing provisions aimed at preventing military personnel from losing their homes.

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San Diego Union Tribune – Congress sent President Obama legislation to avoid a national “fiscal cliff” of middle class tax increases and spending cuts late Tuesday night.

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C.A.R. placed an open letter advertisement today in California’s six largest daily newspapers, calling on President Obama and Congress to preserve the mortgage interest deduction in its entirety during their “fiscal cliff” discussions.

The letter was placed as a full-page ad in the Los Angeles Times, San Francisco Chronicle, San Jose Mercury News, Sacramento Bee, U-T San Diego, and the Orange County Register, and states any proposal that eliminates or attempts to alter in any way the mortgage interest deduction undermines a century-old commitment to the American Dream of home ownership.

“The mortgage interest deduction makes a substantial difference for lower- and middle-income families,” said C.A.R. President Don Faught, under whose signature the letter was written.  “If the deduction is taken away, it would cost the average California taxpayer $3,940 annually; further, more than 694,000 California households would no longer be able to afford to buy a median-priced home.

“While current discussions involve reducing the limit to $500,000 for a primary residence and eliminating it entirely for second homes, any attempts to reduce the mortgage interest deduction would not only have deleterious effects on homeownership, but also be tantamount to taking the first step toward wholesale elimination of this long-standing deduction,” the letter states.

The letter also asks the public to visit http://www.KeepTheMID.com to learn how they can contact their member of Congress and ask them to protect the mortgage interest deduction.

Read the open letter