Skip to comments.3.8% Tax: What's True, What's Not
Posted on 10/25/2012 8:52:18 AM PDT by shadeaud
Rumors about the 3.8% Medicare tax continue to circulate. Here's the definitive word on what's true and what's not on how the tax impacts real estate.Ever since health care reform was enacted into law more than two years ago, rumors have been circulating on the Internet and in e-mails that the law contains a 3.8 percent tax on real estate. NAR quickly released material to show that the tax doesnt target real estate and will in fact affect very few home sales, because its a tax that will only affect high-income households that realize a substantial gain on an asset sale, including on a home sale, once other factors are taken into account. Maybe 2-3 percent of home sellers will be affected.
(Excerpt) Read more at realtormag.realtor.org ...
Oh, I see it’s no biggie because only the rich will pay - ((eye roll))
Just as the income tax started out - “it just affect 2-3% of income earners”.
I checked into this because I had to plan on when to sell our house, either pushing for this year or not.
Seems that I don’t hit the cutoff point in order to have to pay this tax - yet. We know that the cutoff point will continually be lowered and the net widened until eventually all home sales would be subject to the tax.
What is left unmentioned is that the sale of any other residence like vacation home or renal property IS automatically liable. So what happens to home price quotes in 2013? Any guesses?
And, as I indicate at the start, this is only current law, just wait for the inevitable adjustments as ObamaCare deficits grow. No revenue source will be safe from adjustment to increase government income.
Yes, calculated in the next year when filing out the tax returns, but subject to withholding and estimated tax payment requirements to avoid an underpayment of tax penalty. So you'd be a fool not to calculate the potential liability at the time of the sale and adjust your payments accordingly.
It will be like the AMT, deal.
This is hideous what is going to happen on January 1.
It is a sur-tax that affects not only real estate but other transactions as well...
The most I ever made in one year of income was about $62,000. I am NOT a high income earner.
However, I don’t tend to buy & sell my properties every few years.
I held my first house for 29 years. When I sold, the market was somewhat down. Didn’t make any money, and the ‘calculated profit was not much at all.
I held my 2nd house for 16 years. I made a fair amount of profit on the sale of the 2nd house, but when all the calculations were done, I didn’t reach the magic number of $250,000 in profit, after which amount I could be taxed. So I owed nothing. IF I had been married, that ‘tax free’ amount would have been $500,000.
The amount of income you make isn’t the only criteria for whether this 3.8% tax will hit you. It is more closely tied to how long you hold your asset or home.
This tax isn’t connected to health care by the most energetic stretch.
Obama is just hitting home sellers with a tax without any explanation of where that money will be spent by Washington.
It is a killer blow to anyone trying to sell a house.
Also, this tax may be confused with the 3.8% tax on stock dividends that starts after January 1, 2013. It is another tax to help pay for Obamacare. I so detest Obamacare!
How else to pay for deathcare and everyone’s ObamaPone?
I do not understand why the Republicans will not stop this - what cowards.