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Recent Changes to Capital Gains Tax upon The Sale Of Real Estate
Recent Changes to Capital Gains Tax upon the Sale of Real Estate
Effective: January 1, 2013 Supplemental Health Care Reform Tax upon the Capital Gain sale of Certain Real Property.
There has been a great deal of misunderstanding that the new Health Care Reform Bill imposes a 3.8% sales tax on the sale of each property.
First, there is no “sales” tax on the sale of real property. However, the new law does impose a supplement capital gains tax on certain property sales made by certain sellers. The new law contains a 3.8% tax on “unearned income” (capital gains) for certain level income individuals.
To be subject to the new 3.8% capital gains tax, you must earn $200,000.00 if you are single or a married couple making more than $250,000.00. The capital gain on the home sale must exceed $250,000.00 if this is a primary home and you are single or $500,000.00 if you are married. For example, if you and your spouse make $300,000.00 annually and you bought a home that you lived in for more than two years for $600,000.00 that now sells for $1 million, the capital gains tax on that home sale would be zero. ... more
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