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3.8% Tax: What's True, What's Not
Realtor Magazine ^ | 10/2012 | Robert Freedman

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 doesn’t target real estate and will in fact affect very few home sales, because it’s 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 ...

TOPICS: Business/Economy; Government
KEYWORDS: medicare; tax

1 posted on 10/25/2012 8:52:19 AM PDT by shadeaud
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To: shadeaud

Oh, I see it’s no biggie because only the rich will pay - ((eye roll))

2 posted on 10/25/2012 8:55:10 AM PDT by svcw (Why is one cell on another planet considered life, and in the womb it is not.)
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To: svcw

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.

3 posted on 10/25/2012 9:00:44 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: shadeaud
Yes, under CURRENT LAW to be liable for this ObamaCare tax you have to exceed the safe harbor profit on the sale of your principal residence AND exceed the MAGI (Modified Adjusted Gross Income) for that year. What this idiot article ignores is that exceeding the safe harbor profit would automatically make your MAGI higher, but that is just my snark.

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.

4 posted on 10/25/2012 9:12:08 AM PDT by SES1066 (Government is NOT the reason for my existence!)
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To: shadeaud
That’s because the tax filer would do the calculation in 2014 for the 2013 tax year. Because it’s not a tax on a real estate sale but rather on a capital gain, it’s not calculated at the time of an asset sale, whether that asset is a house or something else. It’s calculated at the time the filer figures his or her tax.

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.

5 posted on 10/25/2012 9:17:02 AM PDT by NonValueAdded ("Why not eliminate the middle man and have whoever feeds Obama his lines debate Romney directly?")
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To: MrB

It will be like the AMT, deal.
This is hideous what is going to happen on January 1.

6 posted on 10/25/2012 9:18:51 AM PDT by svcw (Why is one cell on another planet considered life, and in the womb it is not.)
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To: shadeaud

It is a sur-tax that affects not only real estate but other transactions as well...

7 posted on 10/25/2012 9:19:19 AM PDT by BlessingsofLiberty (Remember Brian Terry...)
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To: shadeaud

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.

8 posted on 10/25/2012 10:17:34 AM PDT by ridesthemiles
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To: ridesthemiles

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!

9 posted on 10/25/2012 1:51:22 PM PDT by pjpblush
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To: pjpblush

How else to pay for deathcare and everyone’s ObamaPone?

10 posted on 10/25/2012 1:53:56 PM PDT by eyedigress ((zOld storm chaser from the west)/?)
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To: svcw
Yep. That's exactly the way the architects of this monstrosity want people to think. By the time the schmucks start getting seriously bled, it will be way too late for them to do anything about it.
11 posted on 10/25/2012 6:30:01 PM PDT by hinckley buzzard
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To: hinckley buzzard

I do not understand why the Republicans will not stop this - what cowards.

12 posted on 10/25/2012 6:36:04 PM PDT by svcw (Why is one cell on another planet considered life, and in the womb it is not.)
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