Reminder: 3.8% Tax Is Not Tax on Real Estate
We’ve covered this on the blog before, but it bears repeating. Here’s what what NAR has to say on the topic:
Tags: 3.8% tax, health care reform, real estate tax
Tax time is nearing and once more rumors are circulating on the Internet and by email that the health care reform law enacted two years ago includes a 3.8% transfer tax on real estate starting in 2013. That rumor is not true and NAR has material available to you to explain how that 3.8% tax works. It’s a tax on a very narrow band of investment income for high-wealth households (those who earn $250,000 in a joint return or $200,000 as an individual) that could come into play on the sale of a house if the sales gain is more than $500,000 for a married couple or $250,000 for an individual. Even in the unlikely event the sales gain is more than that amount, the tax would only apply based on other considerations having to with the household’s income and tax situation. The bottom line is, the tax, which was imposed to help shore up Medicare, will only hit some portion of investment income. Video and explanatory article. Free downloadable brochure on how the tax works. FAQ.