| The recently passed healthcare legislation is a | | | | decided to collect a little bit more of their |
| monstrous bill that will have a hefty impact | | | | investment income from real estate and other |
| throughout our economy. Over the past several | | | | transactions. As such, the new provision only |
| weeks, I have had several people ask me about | | | | applies to individuals earning over $200,000 or |
| a particular provision of the bill that was "snuck | | | | married couples earning over $500,000. |
| into it." The provision is the tax on home sales. | | | | This tax is also not calculated on the sales price |
| I have seen this reported inaccurately in both | | | | of the home as many of the articles lead you to |
| national media and on many blogs. Usually, it is | | | | believe. It is based on the profit that you realized |
| misquoted as being a sales tax of 3.8% on the | | | | from the home. In the above example, if you paid |
| sale of all homes. In many cases, there is an | | | | $300,000 for the home, and sold it for $350,000, |
| example of a sales price and a tax amount. For | | | | only $50,000 would be considered "gains." This |
| instance, the reporter or blogger will state that if | | | | would create a tax due of $1,900 vs. the $13,300 |
| you sale a $350,000 home, you will owe $13,300 | | | | that is often reported. |
| in taxes on your sale. This is simply inaccurate. | | | | Also, the home sale exclusions still apply. So, if it |
| While, the Washington politicians are greedy they | | | | meets the rules for being your primary residence |
| have not yet created a national sales tax. They | | | | for income tax purposes, you can still exclude the |
| have also not created a tax that is likely to hit | | | | first $250,000 in profits if your single, and |
| most people who sale their home. | | | | $500,000 in gains if your married. This has not |
| What this provision of the healthcare bill actually | | | | changed. In the above example, if the home |
| does is that it creates an additional "unearned | | | | qualified as a primary residence, no tax would be |
| income" tax for Medicare that begins in 2013. As | | | | due. Because of this exclusion, the bulk of the |
| Washington increases its attack on the upper | | | | people getting hit with additional taxes will be |
| middle class and others it considers "rich," it has | | | | investors or high earning taxpayers. |