Heard the One about the Obama-Care Tax on Real Estate Transactions?
There are viral emails circulating that claim there are huge taxes coming on the sales of homes starting in 2013 that are hidden in the Affordable Health Care Reform Act of 2010 - also known as Obama-care.
Don't believe everything you read just becasue it's on the internet. There are some that use the internet as a means of circulating propaganda to spread miss-information.
Here's the STRAIGHT SKINNY direct from the National Association of REALTORS:
Incorrect Rumors About 3.8% Transfer Tax Persist
For the third time in the past six months, NAR is being inundated with questions about a real estate transfer tax enacted as part of the Health Care reforms in 2010. THERE IS NO SUCH TAX. A viral Internet posting is riddled with errors.
The Health Care legislation did create a new tax that would apply to a portion of the gain on the sale of any capital asset (including real estate). That tax will apply ONLY to individuals with more than $200,000 Adjusted Gross Income (AGI) (or $250,000 AGI on a joint return). The tax does not apply to any amount excluded from taxation under the $250,000/$500,000 principal residence rules. The tax is never imposed directly on the full amount of any capital gain.
The tax is computed under a multi-step formula that captures only a portion of any gain and will only affect those with total AGI above the amounts noted above. Links are provided for a Q&A on the tax and to a brochure with examples of the tax.
The 3.8 Tax: NAR's Q&A
The 3.8 Tax: NAR's Brochure
NAR Contacts:
Linda Goold 202-383-1083, Samuel Whitfield 202-383-1131