The other day I was fortunate to be included in a dialog with some fellow brokers and financing professionals concerning the upcoming 3.8% tax on real estate and investment income scheduled to take affect January 1, 2012. This was quite an interesting topic but it's very convoluted and can be confusing. The big take-away from this discussion was that this new tax will not affect you unless your Adjusted Gross Income (AGI) is over $200,00 for single filing taxpayer, or $250,000 for married couples filing joint returns. This relieves many of us, but now you ask ‘What happens when I sell my home for a substantial gain? Will I be subject to this new tax?’ This new 3.8% tax does not interfere with the current tax-free exclusion on the first $500,000 (joint filers) or $250,000 (single filers) of gain you make on the sale of your principal home. However, gains of over this or the sale of investment properties may be subject to this new tax depending on your AGI and your profit from the sale. This is where it can get confusing. For more clarification and details, take a look at the attached article, ‘Few to feel hit from home-sales tax tied to health law’ published July 13, 2012 by the Seattle Times, or give me a call and I would be happy to discuss this with you in greater detail.
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