What Do I Tell My Clients About The 3.8% Tax On Home Sales In 2013?

Real Estate Broker/Owner with Carousel Realty of Dyer County Tn 248435000

What do you tell your clients(about 3.8% tax) who plan to sell their homes next year? You tell them that they may or may not have to pay that tax.

Here is an excerpt from Money Magazine discussing the tax:

The new tax, which Congress passed in 2010, affects the net investment income of most joint filers with adjusted gross income of more than $250,000 ($200,000 for single filers). Starting on Jan. 1, 2013, the tax rates on long-term capital gains and dividends for these earners will jump from their current historic low of 15% to 18.8%, assuming Congress extends the current law.

Basically what the new law says is if you and your wife make $250,000 or more in capital gains and dividend income and sell their house then yes they very could have a 3.8% tax on the sale.

For the average homeowner this will not affect the sale of their home in 2013 and beyond.

After further research, I have found out that this 3.8% tax was stuck in the Obamacare law at the last minute. Personally I think this is just another example of class warfare that the democrats are waging in our country. I am hopeful that in January that the new president will with the help of the congress and the senate overturn this bill and replace it with real healthcare reform not loaded with junk like this.

Here is a link to the entire article in Money Magazine.


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Paula McDonald
Magnolia Realty ~ Granbury - Granbury, TX
Magnolia Realty ~ Granbury, TX 936-203-0279
Boy oh boy do we need to be in prayer about this election Mike. Really crucial.
Aug 22, 2012 01:15 AM #1
Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

Paula, I assure you that I have already been in prayer about this.

Aug 22, 2012 02:26 AM #2
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA

Unfortunately - many real estate agents do not KNOW about capital gains taxes OR the consequences of selling investment property.

Aug 22, 2012 06:53 AM #3
Dale Terry
Yadkinville, NC

Mike, you are wrong on one thing.  The income amount will be reduced over time until all transactions are included.  This will happen because like all taxes, they start small and grow.

Aug 22, 2012 07:15 AM #4
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

Another reason to Repeal the the Obamacare program.  People will be saying...Well I didn't know.  Of course not, they didn't want you to know.

Aug 22, 2012 08:20 AM #5
Joni Bailey
Berkshire Hathaway Home Services - Anderson Properties - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Ditto what you said "I am hopeful that in January that the new president will with the help of the congress and the senate overturn this bill and replace it with real healthcare reform not loaded with junk like this."

Aug 22, 2012 11:14 PM #6
Curtis Van Carter
Better Homes & Gardens Wine Country Group - Yountville, CA
Your Napa Valley Broker Extraordinaire


I can't agree with you more about hopefully they will repeal Obama Care and come up with a better plan. cheers cvc

Aug 23, 2012 02:04 AM #7
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

Dale in comment #4 is right on.  Just look at the Federal Income Tax.  It was only to effect the top 1%.

Aug 23, 2012 09:26 PM #8
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Mike Frazier

Northwest Tennessee Realtor
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