A friend recently sent me an article printed in the Spokesman Review, a Spokane Washington newspaper titled “Health law’s heavy impact.“ In the article the following statement was made,
“TAX ON HOME SALES.
Imposes a 3.8% tax on home sales and other real estate transactions. Middle income people must pay the full tax even if they are “rich” for only one day-the day they sell their house and buy a new one.”
Fortunately this statement is wrong. The Spokesman really twisted the changes to the $250,000/$500,000 capital gains tax exemptions on the sale of your home. Below is an excerpt from the National Association of Realtor’s government affairs website.
NEW MEDICARE TAX ON “UNEARNED” NET INVESTMENT INCOME (click for the full file)
Q: Who will be subject to the new taxes imposed in the health legislation?
A: A new 3.8% tax will apply to the “unearned” income of “High Income” taxpayers. Another 0.9% tax will apply to the “earned” income of many of these same individuals. Both levies are referred to as “Medicare” taxes. (For a description of the new 0.9% tax, see separate Q&A entitled “NEW TAX ON EARNED INCOME: WAGES, SALARIES AND COMMISSIONS.”)
Q: Who is a “High Income” Taxpayer?
A: Those whose tax filing status is “single” will be subject to the new unearned income taxes if they have Adjusted Gross Income (AGI) of more than $200,000. Married couples filing a joint return with AGI of more than $250,000 will also be subject to the new tax. (The AGI threshold for married filing separate returns is $125,000.)
Q: Are the $200,000 and $250,000 thresholds indexed for inflation?
A: No. Thus, over time, more individuals may become subject to this tax.
Q: When does the new 3.8% Medicare tax take effect?
A: The new Medicare tax on unearned income will take effect January 1, 2013.
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Ah, you misunderstand. I am totally against Obamacare. The point here is that the media misrepresented what was happening. Being in the real estate business when the media says there is going to be a new HUGE tax on the sale of a home, it needs to be researched. I was not defending the tax at all, just pointing out the misrepresentation of the press.