Real Estate Sales Tax Scare

We’ve had a few clients ask us about this “real estate sales tax” currently flying around on the World Wide Web.  Is it true?  Sometimes.  The new health care law made some changes to include a Medicare tax of 3.8% on investment income for the high income earners.  Investment income includes taxable gains on the sale of real estate.  You still get to exclude $250,000 of your gain on the sale of your principal residence ($500,000 if married) from taxable gains.

A tax attorney from Pennsylvania who calls herself “Taxgirl” wrote a great blog on this topic a little while ago.   See http://www.taxgirl.com/ask-the-taxgirl-real-estate-tax-in-health-care-law/ .

She did a thorough job in explaining what you need to know if you are selling real estate.  Of course, if congress repeals the health care law in its entirety, this could become a non-issue.  Call your tax professional for assistance in determining if this “surtax” on investment income is likely to apply to you.

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