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!
Deanna Howard, Realtor, SFR, CREN
752 10th Street
Marion, Iowa 52302
Licensed in the State of Iowa