Friday, February 15, 2013

3.8% "Real Estate" Medicare Tax

What ... there's a "3.8% Real Estate Tax" that came into effect January 2013!?!    

Yes, there is a new tax that is being tacked onto Real Estate transactions (sales), but it's really an Investment Income Tax and known as the 3.8% Medicare Tax

You see, when you sell your home, it's possible that you might have this extra tax, but NOT ALL Real Estate sales will have this tax.   In a nutshell, the 3.8% Medicare Tax is a tax on Investment Income, an income which is derived from the sale of the property. This tax will only be on transactions where the person selling the home EARNS more than the amount on the transaction AND the individual has an INCOME above $200,000 or couples who jointly have an income above $250,000. 

Most likely, the sale of your principal residence won't be subject to the 3.8% Medicare Tax. However, it is always best to consult with a tax advisor to see if this 3.8% Medicare Tax will apply to you. 

Here's a great PDF Pamphlet that the National Association of Realtor has created about the "Top 10 Things You Need to Know About the 3.8% Tax"


Let me know if I can help you or your family/friends with any Real Estate needs. Please know that I am never too busy for you or your referral & I would honor the chance to earn the business!  

*If there's a neighborhood that you'd like more information on, simply Email me or go to my Website to request a personal Home Search. 

*If you're thinking about Selling your home and would like to find out how much your home is worth in the current market, simply go to my Website to fill out the form.