1) It is NOT a real estate tax. It is worse. It will be a 3.8% on ‘unearned income’. In other words, pretty much anything that is not wages from an employer.
2) At this point the tax would apply to only ‘high income’ tax payers, i.e. single tax payer of >= $200,000; married >= $250,000. BTW, another tax on being married – if not married, but jointly owning the same asset, that couple would get to make a $400,000 before the tax would kick in.
3) If the asset is a principal residence, the taxable gain is the amount of profit that exceeds $500,000.
4) The sale of any other assets does not have the $500,000 exclusion. This would include a second home, stocks, bonds, mortgage notes [that’s me], businesses, land, interest income, i.e. any gain that is not from a job would be taxed 3.8% on the entire profit.
5) None of these parameters are inflation adjusted, so:
a. Over time income will increase. Therefore, $250,000 will become far more common and in the not too distant future will be ‘middle income’.
b. Over time home prices will eventually increase, causing many more of those that stay in their homes for longer periods to become to larger profits. So, more people will have more than $500,000 in profit from the sale of their primary home.
c. So, eventually, most people (our kids) that stay in their home for the normal 5-7 years, will pay this tax on the sale of their principal home.
Article Source
http://christopherfountain.com/2010/05/13/obamacare3-8-tax-on-your-home-...
Regarding the real estate sales tax:
1) It is NOT a real estate tax. It is worse. It will be a 3.8% on ‘unearned income’. In other words, pretty much anything that is not wages from an employer.
2) At this point the tax would apply to only ‘high income’ tax payers, i.e. single tax payer of >= $200,000; married >= $250,000. BTW, another tax on being married – if not married, but jointly owning the same asset, that couple would get to make a $400,000 before the tax would kick in.
3) If the asset is a principal residence, the taxable gain is the amount of profit that exceeds $500,000.
4) The sale of any other assets does not have the $500,000 exclusion. This would include a second home, stocks, bonds, mortgage notes [that’s me], businesses, land, interest income, i.e. any gain that is not from a job would be taxed 3.8% on the entire profit.
5) None of these parameters are inflation adjusted, so:
a. Over time income will increase. Therefore, $250,000 will become far more common and in the not too distant future will be ‘middle income’.
b. Over time home prices will eventually increase, causing many more of those that stay in their homes for longer periods to become to larger profits. So, more people will have more than $500,000 in profit from the sale of their primary home.
c. So, eventually, most people (our kids) that stay in their home for the normal 5-7 years, will pay this tax on the sale of their principal home.