Monday, March 21, 2011

Debunking Tax Myths:

 Myth #1

Starting in 2013, not only will you pay the closing costs and real estate fee when you sell your house but now you will pay a 3.8% Sales Tax. So, if you sell your home for $400,000, perhaps wanting to down size if you are a senior you will pay $15,200 in Tax.

OMG 3.8% tax on all house sales in Obamacare bill! Really? No.

By Patrick     Thursday, 13 May 2010, 8:52 am     Quote     6,359 views     71 comments     Email       Share on Facebook

I’ve been getting emails of articles like “Now We Know… Obamacare Includes 3.8% Tax On Home Sales For All Americans”
Unfortunately for Obama-haters, it’s not true. The typical couple wouldn’t have a $500,000 profit on a house sale, and so would pay zero tax on profits from a house sale. And note it’s a tax on profits in excess of the exclusion amount, and not a tax on the sale price amount.
The truth about the bill is that if you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the additional 3.8 percent tax on any gain realized over this threshold.
Most people who sell their homes will not be impacted by these new regulations.
Even Realtors admit that the hype about the 3.8% tax is false:
Q-9: Will the $250,000/$500,000 exclusion on the sale of a principal residence continue to apply?
A: Yes. Any gain from the sale of a principal residence that is less than $250,000 (individual) or $500,000 (joint return) will continue to be excluded from the income tax. The new 3.8% tax will NOT apply to this excluded amount of the gain.
And again, that tax is only on profits above $250K or $500K and not on the total sales price.
There are some good reasons to be annoyed at Obama (like continuing Bush’s occupation of Iraq, and opposing real reform of Wall Street, and pushing higher mortgage debt rather than lower house prices). But this tax on large real estate profits is fair, starts in 2013, and doesn’t even apply to most people. Here’s more:
So, please, include a little more reality in your Obama-bashing. Otherwise you just look foolish.

Lisa Ekanger Your Hometown Realtor!

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