I was recently visiting one of my wealthy clients that also happens to be a retired tax attorney. The topic changed to state and federal taxes. He mentioned how he was saving money by relocating to California and no longer paying the New York City and State of New York income taxes. He also stated how he was saving big on the cheaper California property tax, which is 1% times the purchase price.
Then the topic changed to the roll back of the Bush Era tax cuts. He raised an example! If someone owns a $3.5 million home and waited until next year to sell, and the tax cuts were allowed to go from the present 15% back to the 20% capital gains with the 3.8% tax for Obama Care, the person would pay $265,000 more in capital gains. So his question to me was, if I noticed any high end or investment property being sold now to beat the coming increase. I responded that I had not yet heard anyone say they wanted to sell now to escape the increase. However as time goes on and it becomes more evident that the taxes would return to the old rate, perhaps this would trigger sales.
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