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3.8% Sales Tax in 2013, get the facts

14 Oct

There are many e-mails circulating about a 3.8 percent sales tax on homes starting in 2013 thanks to Obama Health Care reform. This is not a sales tax and only affects a small portion of sellers in high income tax brackets and is taxed on the profit.

According to FactCheck.com only a tiny percentage of home sellers will pay the tax. Only those with incomes over $200,000 a year (or $250,000 for married couples filing jointly) will be subject to it.

And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

I think this stands repeating: ONLY those with incomes of $200,000 or more will be subject to it (or $250,000 for married couples filing jointly). And the tax will only be on the portion of your PROFIT that is above $250,000, (or $500,000 for married couples).
So… instead of an additional $15,200 tax on the sale of your $400,000 home. It’s possible you’d have ZERO additional tax if you don’t make $200,000 a year. And if you do make more than that… and you make no profit… you’d still have a ZERO additional tax burden. Let’s say you were lucky, you manage to make $300,000 a year in income, and you sold your home for a $100,000 profit. You’d only be paying $3,800. in additional tax. $11,400 less than the inflammatory e-mail suggests.

The goal of the e-mails is to distort the facts because someone has an agenda. Please do your homework before falling for this.

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2 Comments

Posted by on October 14, 2010 in Broker remarks, Real Estate

 

2 responses to “3.8% Sales Tax in 2013, get the facts

  1. Jim Courtney

    October 14, 2010 at 8:56 am

    Allen, great insight. I appreciate it and will share it with everyone I know. Thanks!

     
  2. Allen Stout

    October 30, 2010 at 10:35 am

    This is not for those who don’t want to be confused by the facts.

     

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