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Homebuyer Credit to Continue Helping People Get into Crazy Debt?

Thumbnail image for overwhelmed.jpgMaybe! The opportunity to take advantage of the current credit expires on November 30th. Luckily, the brain trust known as the U.S. Senate is all over this and is going to get a new plan in place come hell or high water.
The best part is that under the Senate’s latest proposal, the credit will now be “extended beyond first time buyers,” as reported by Bloomberg.
So, if you’ve lived in your current shack for five years and you’re looking to upgrade, you’ll be eligible for a $6,500 credit. First time homebuyers will still receive an $8,000 The new extension of the credit would be available for home purchases under contract by April 30, 2010 and close by the end of June.

But that’s not all! Under the new plan, the credit would be available for individuals earning $125k up from $75k and couples earning $250k up from $150k. Presumably more McMansions will get purchased this way.
More good news: this thing has bipartisan support:

Senate Minority Leader Mitch McConnell, a Kentucky Republican, agreed that most lawmakers support the unemployment and homebuyer measures. “We’re not that far away from an agreement,” he said earlier today.

Who knew it was possible? The problem is, not everyone thinks this is a good idea, including Joe Kristan over at Tax Update Blog:

It’s nice to know that a majority of the millionaires in the Senate think it’s wise to spend $40,000 to $80,000 of our money for each new home sale caused by the credit, even though the credit is rife with fraud.
The credit extension would be tied to an extension of unemployment benefits; the provisions may still be changed, and it has to be reconciled with a House bill that has no homebuyer credit provision.
If they extend it this time, does anybody believe they won’t try to extend it again every time it is set to expire?

And Tax Girl:

Does that cover everybody? Does everyone get a tax credit now? Cause we wouldn’t want to be handing out that free money and leave someone out.

And Don’t Mess with Taxes:

My concern is that if people need the credit to get into a first home or move up to a larger one, are they getting in over their heads in debt? And isn’t that what got us into the economic trouble we’re in now?

Call us party poopers but we’ll go with accountants over the U.S. Senate any day.
Homebuyer Credit Extension a Done Deal? NOL Carrybacks Enhanced? [Tax Update Blog]
First Time Homebuyer’s Credit Likely Expanded [Tax Girl]
Reconfigured home buyer tax credit [Don’t Mess With Taxes]
Also see: Lawmakers Find A Way To Outfox 4-Year Old Tax Cheats [DB]