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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsI just got this e-mail from a friend, is it true?
There is more to the e-mil but it is personal in detail. They asked me If I know anything about this tax.. Sure way to find our. Any DUers know of this?
> The National Association of REALTORS is all over this and working to get it repealed, before it takes effect. But, I am very pleased we aren't the only ones who know about this ploy to steal billions from unsuspecting homeowners. How many REALTORS do you think will vote Democratic in 2012?
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> Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That's $3,800 on a $100,000 home, etc. When did this happen? It's in the health care bill and goes into effect in 2013.
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> Why 2013? Could it be to come to light AFTER the 2012 elections? So, this is "change you can believe in"? Under the new health care bill all real estate transactions will be subject to a 3.8% Sales Tax.
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> If you sell a $400,000 home, there will be a $15,200 tax.
> This bill is set to screw the retiring generation who often downsize their homes. Does this make your November and 2012 vote more important?
>
> Oh, you weren't aware this was in the Obamacare bill? Guess what, you aren't alone. There are more than a few members of Congress that aren't aware of it either http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home < http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home>
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Sherman A1
(38,958 posts)all the links are to gop websites so what does that tell you?
DJ13
(23,671 posts)Drahthaardogs
(6,843 posts)The Velveteen Ocelot
(115,679 posts)There is a capital gains tax that could affect a few high earners, but the 3.7% referenced in the email does not apply to ordinary home sales.
nadinbrzezinski
(154,021 posts)tied to the health care bill.
former9thward
(31,984 posts)It should only apply to a small amount of home sales but it is there. http://www.snopes.com/politics/taxes/realestate.asp
WCGreen
(45,558 posts)if you didn't roll the gain over into your ext home.
In other words, the gain was delayed until you sold your home and did not buy another one for two years.
It all went away if you held on to your home until you were 55.
This was repealed back in the 90's and replaced that gain threshold with 500,000 for single and over 1,000,000 for a couple.
This effectively made the tax null and void for 99.99% of the people.
The new law is designed the same way. If you roll the gain into your next home, you will not need to pay a tax until you sell the last home. All the only part of that gain that will be taxable, from what I understand, is a gain over 125,000 for an individual and 250,000 for a couple filing a joint rreturn.
And remember, that is only the total gain when you sell your last home.
So if you sell your home at a 249,999 gain, what you paid for it minus what you recieved from it, you would owe nothing.
former9thward
(31,984 posts)But as snopes points out it is part of the health care law.
WCGreen
(45,558 posts)That is what should be stressed.
But then again, partisans are always looking for a way to hate the other guy...
former9thward
(31,984 posts)And I think it should apply to all profit without any exclusion. Making the 250k exclusion was yet one more thing which contributed to the housing bubble.
mdmc
(29,068 posts)we can do it
(12,182 posts)gawd they can't even come up with anything original, just keep recycling the same shit every few months
SickOfTheOnePct
(7,290 posts)And your home sales exceeds the capital gains exemption for primary home sales ($250,000 single/$500,000 couple), then yes, there is a 3.8% Medicare tax on the amount over the exemption amount.
we can do it
(12,182 posts)so you'd have to get more than $250,000 more than you paid for it (good luck with that)
SickOfTheOnePct
(7,290 posts)Profit. And even with the drop in values the past 5 years, many older people will indeed make that much on homes that they've owned for decades.
Their saving grace will be that more than likely, they won't exceed the income thresholds that put the tax in play.
The point is that yes, there is a provision in the healthcare law that could be triggered by the sale of a home.
MineralMan
(146,287 posts)It's going to be hard for a typical homeowner to have enough gain to overcome the exemption anyhow. Very few people selling a home they live in will ever be subject to this. Larger real estate investors on the other hand, may end up paying it.
TheMastersNemesis
(10,602 posts)This meme is absolutely false. There is no such tax by Obama or anyone else. It would be a national sales tax and there is nothing in Congress that has been proposed. There is no truth in what the RW ever says.
proud2BlibKansan
(96,793 posts)Because emails from friends are almost always not true
MineralMan
(146,287 posts)There is a tax on the PROFIT from selling a house for more than you have in it. There is also an exemption for families that are selling a home and buying a new home, as long as that home is their primary residence.
Right now, of course, not many people have any profit in their home to take.
So, the typical homeowner does not have to be concerned about this at all. House flippers, on the other hand, might.
Typical of half-truths and distortions in such forwarded emails. You should always assume that what you get in that fashion is probably not true as it stands, and do some research. This one's mostly not true as it applies to individuals selling the home they live in.
elleng
(130,865 posts)very common when house values were appreciating, and still applicable to gains realized in many sales today, I expect. Exemptions you mention important for people to note.
JohnnyRingo
(18,628 posts)This email was written to purposely deceive voters, and after pointing out that the tax only applies to couples who sell their home at more than a $500,000 profit, the bottom line is that Republicans are liars. Indeed, the only profit subject to tax will be the amount above that $500,000 figure.
This tax is aimed at investors who buy & sell property for the sake of investment, not homeowners.
crazylikafox
(2,754 posts)Singles who sell their homes are only entitled to 1/2 that amount. And it's not that hard to go over that $250,000 figure if you've owned your home for 35 years, as I have, and you live in a very high cost-of-living area. This concerns me. Hopefully there will be some exemptions for poor old ladies living on their Social Security, like me. I guess I need to do some research. I was planning on selling my house & downsizing in the next 2-3 years.
Saving Hawaii
(441 posts)DURHAM D
(32,609 posts)you add the cost of capital improvements to your original purchase price.
JohnnyRingo
(18,628 posts)If you can turn a cool half million dollar profit on your current home to buy a smaller house, that's a $9,500 tax. In another way: You pocket $500,000 above the original cost of your saavy investment and have to add less than 10 grand to the price of that cheaper downsized home. The difference goes in your purse.
If that will truly change your lifestyle, perhaps you can negotiate a slightly better deal on the new property. Tell the realtor you can't afford the $300k asking, they'll have to accept $290k, and break even on the whole deal.
bluestate10
(10,942 posts)A bill was approved late last year that would impose a minicule levy on people that buy homes. The levy was something like a fraction of 1% and was intended to cover some aspect of home sale certification that the federal government was going to stop financing. I wish I knew more about the exact details, but I can say for certain that your email correspondent has his or her head of their ass.
customerserviceguy
(25,183 posts)and other posters here have refuted it more effectively than I could do, the fact remains: Who's making a profit on real estate these days, unless you bought quite some time ago?
The calculations don't take into account any basis costs, look at that one with the $400K home. Did the person selling it pay zero for it? Even if it was inherited, it got a stepped-up basis at the date of the deceased's passing, that often keeps heirs from having to pay taxes on homes that are not converted into principal residences.
It's BS.