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  • October 2010
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  • Mary K. Lenahan, J.D., Realtor

A New Tax on Capital Gains from the Sale of Real Estate on High Earners


A new  tax on the sael of real estate is apparently included in the Healthcare Bill.   The healthcare reform bill passed last year includes a  3.8 percent tax on unearned income effective in 2013.   

Unearned income includes capital gains (or profits) from the sale of real estate.  The 3.8 percent tax is in addition to the capital gains tax.  It applies only to high income earners.   Further it will not  impact the exclusion on capital gains earned from the sale of a primary residence up to $250,000 for individuals and up to $500,000 for married couples. 

  When it comes to personal primary residences, however,  this tax applies only under limited circumstances:

1.  To profits greater than $250,000 for a single person, or $500,000 for married

if

2.  Seller’s annual income is  more than $200,000 if single, or $250,000 if married.

Thus, for example, when the law becomes effective in 2013, if you own a second home and earn more than $200k single /500k married, you will pay 3.8% tax on any profit from the sale o f the property, in addition to the capital gain tax . 

See:  http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/

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