There is a lot of information spreading around the internet about the new 3.8% tax that will be added to some real estate sales beginning January 1, 2013. Unfortunately, the information you read online is not always true, and its no different with this 3.8% tax on home sales.

As with any information you read that could have important legal or tax consequences to you, your family or your estate, you should always consult with the appropriate legal or tax professional. So first, I AM NEITHER ONE OF THOSE! But I can read, and the following is my interpretation of the information I have read over time and is presented in summary here for you for entertainment value only. You are welcome to take this information to your adviser for verification. Please post your findings or comments below if you do consult with an adviser.

So from what I have read, what is truth and what is fiction?

• Truth: There is a new 3.8% tax that will be applied to SOME real estate home sales beginning January 1, 2013.
• Fiction: This tax will apply across the board and all real estate sales and sellers will be impacted.

This is the new tax in summary:

Who will it apply to: 

• Individuals with an adjusted gross income (AGI) greater than $200,000.
• Couples filing a joint return with an AGI more than $250,000.

What kind of income is effected:

• Interest, dividends, rents (less expenses) and capital gains (less capital losses).

How to figure it:

• The new tax applies to the LESSOR of
• Investment income amount
• Excess AGI over the $200,000 or $250,000 threshholds

For more information about the new 3.8% tax on home sales, please see the following document from the National Association of Realtors, of which I am a member.

Let me know what you think below!

Download File(Type: PDF, Size: 802.61KB)