The Tax that Cried Wolf: Obamacare 3.8% Tax and Home Sales

With the recent political climate, taxes and Obamacare has been a hot topic of debate. The plan is to enforce a 3.8% tax to offset the Medicare overhaul plans and generate about 210 billion by 2023 beginning January 1, 2013. Cries that it will be a large imposition on all real estate transactions have been circulating around since the bill was introduced. It is a complicated bill, but alas, it will not affect most people. 

The tax will only apply to the lesser amount of one's investment income  or the excess of the annual gross income (AGI) over the amount of $200,000 or $250,000. Your AGI can be defined as your gross income after applicable deductions and exemptions. According to the National Association of REALTORS, this will only apply to individuals with an AGI above 200,000 or couples filing a joint return over 250,000 AGI or more. The types of income this will apply to are: interest, dividends, rents (less expenses), and capital gains (less capital losses).

So, before making any rash decisions for the new year, take a closer look at your paperwork or consult a professional. 

Written by Ciara Brewer on behalf of Monica Brewer