Did you know your stomach will explode if you eat pop rocks and coke together?
Have you heard Obamacare is going to to cost you thousands of dollars in sales tax when you sell your home?
None of the above statements is true.
Well, okay, the last one is partially true, but there has been a lot of exaggeration and inaccurate information circulating out there. Let's take a look at the details.
Code Section 1411 of the Patient Protection Affordable Care Act (PPACA) will impose a 3.8% Medicare tax (not a sales tax or a transfer tax) on "unearned" investment income, starting in 2013, including capital gains, dividends, interest and rents minus expenses. The tax will also apply to some real estate transactions under certain circumstances:
- The tax will be imposed on individuals with adjusted gross income (AGI) over $200,000, or couples filing jointly over $250,000 (about 3% of all American households).
- The tax will be imposed on profits realized over the capital gains thresholds - $250,000 for an individual or $500,000 for a couple.
- The tax applies to the lesser of two amounts: the profit over the capital gains exclusion, or the amount by which the income (increased by the net profit) now exceeds the threshold allowed.
image: samantha celera, anja_johnson
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