Have you heard the rumor that a new real estate sales tax was created to help fund the health care plan targeting high wage earners?
Turns out this rumor has just enough truth in it to create chaos. Reality is the majority of people won’t be effected by it, including some high wage earners.
The new “Medicare tax” will affect real estate sellers who would already be taxed on capital gains under current tax laws. It adds to the current capital gains tax IF your adjusted gross income is over $200,000 / $250,000 (filing individually or jointly). If you sell your primary residence, you still have your existing capital gains tax exemption. (So far they haven’t taken that away from us.) For those selling second homes and investment properties, the tax will only be applied to the amount of gain realized.
Click here to read The National Association of Realtors FAQ on this rumor.