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Have you heard about the 3.8% tax on real estate?

Posted by kim carpenter on September 22, 2010
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Well, let’s set the record straight, yes there was a provision added to the PPACA (Patient Protection Affordable Care Act Sec 1411) but here are the facts:

  • This new code will impose a 3.8% tax on the lesser of “net investment income” or the excess of modified adjusted gross income over 1)$250,000 for taxpayers filing jointly 2)$125,000 for married taxpayers filing separately 3)$200,000 for all other cases
  • If you sell your home  for a profit over the capital gains threshold of $250,000 for individuals and $500,000 for couples, you would be required to pay 3.8% on the amount over those thresholds

Seeing that the median sales price is under $200,000 and that only 1.5% of all households have income of $250,000 or above, this tax will only impact a small percentage of home sellers when implemented in 2013.

I hope this clarifies the issue a little.  If you have further questions, consult your tax adviser.

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