This new healthcare tax could hit you in an unexpected place
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10/04/2012 06:21 PM
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... The housing market may indeed be recovering, as many experts suggest, but investors are still struggling to understand what, if any, taxes they'll owe upon selling their homes.Quoting: waht
At issue is how the new "Medicare tax" will apply to real-estate transactions.
Passed in 2010 to help fund the health-care overhaul, this 3.8% surtax kicks in next year on many forms of investment income Ė including some interest, dividends, rents, and capital gains.
While its effect on home sales won't be as far-reaching as many fear, the Medicare tax could pack a punch for certain investors. It is not a sales tax. And it won't apply to home-sale gains excluded from income under current law. But it could affect investors with outsize gains or gains from the sale of a vacation home or investment property.
Determining whether you will be subject to the tax is no easy matter.
"The confusion lies in the fact that it's not a yes or a no..."
[link to www.economicpolicyjournal.com]
So, if you're selling a house (most likely a second home or investment property since one's own residence usually doesn't count) with capital gains (profit after expenses) of $100,000, you'll have to pay $3,800. Doesn't sound life-threatening or particularly applicable to most of us.
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