Keeping it Real (Estate) with Deanna - The load down on the 2013 3.8% real estate tax
The good news is that the 3.8 percent real estate tax doesn’t go into effect for a whole year, Jan. 1, 2013.
The even better news is that it will not be imposed on all real estate transactions. The tax was passed by Congress in 2010 with the purpose of generating $210 billion for President Barack Obama’s health care and Medicare overhauls. The legislation will impose a 3.8 percent tax on some income from interest, dividends, rents (minus expenses) and capital gains (minus capital losses). This tax will apply to individuals with an adjusted gross income more than $200,000 and couples filing a joint return with more than $250,000.
The basic formula is that the tax applies to the lesser of the investment income amount and the excess of adjusted gross income more than $200,000 or $250,000 amount.
Have a real estate question? Send it my way!
Thanks!
Deanna
Deanna Howard, Realtor, SFR, CREN
Iowa Realty
752 10th Street
Marion, Iowa 52302
(319) 929-3836
Licensed in the State of Iowa
B.A. Morelli
9:25 am on Wednesday, December 28, 2011
Does the burden of the tax fall entirely on the home buyer?
Deanna Howard
10:40 am on Wednesday, December 28, 2011
It's basically a tax on the gain from the sale of a house. The primary residence exclusion still applies, so it is likely to affect investors the most. The vast majority of Iowans would not pay the tax on the sale of their property. However, if someone falls into this category they might want to look to sell in 2012 rather than 2013 to save some money.