We are continuing to receive inquires and particularly so since it is tax season regarding a “3.8% real estate transfer tax created in the new care bill“.
The following information is from the post “3.8 transfer tax” today on NAR’s website at www.realtor.org:
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
Linda Goold 202-383-1083, Samuel Whitfield 202-383-1131
Contact us today!
877.515.7443
info@willisallen.com
