“Chris, are you ready for the Obamacare real estate trading tax”? Want more articles such as this? That was a real question, I used to be asked two weekends back when I was in San Diego speaking to 450 energetic real estate investors. In the worried look on the true face of the woman asking the question, apparently she was serious! That night I decided to Google the lady’s question and see if it had any merit – and here is the answer I came up with. Is There A Tax On Real Estate Investment In Obamacare?
Yes. And No. As grayish as that sounds, the simple truth is real very white and dark. Before I explain, I am going to tell you that worrying about it is best left to investors that like to worry. Not worrying about it is best left to investors that like to make money.
In the healthcare bill, there’s a new tax created on investment income for high-income households and it is called a 3.8% Medicare tax. This tax will not have an effect on all investment income and will not influence all real estate transactions. It is not a sales tax, but a levy tax against profit on certain transactions that meet a high threshold.
What Are The Parameters Of THE BRAND NEW Real Estate Tax? 200,000. Regardless of the transaction, this is actually the first stipulation that must be fulfilled and excludes about 97% of most U.S. Following that, well you definitely get penalized for making good business decisions! 500,000 for couples. That is a high threshold.
At that time the tax will activate but only applies to the amount of income above the exclusion. 250,000 for the year. If not, there are no taxes then. HOW COME The Medicare 3.8% Tax on Investment Income Even In MEDICAL Care Bill? Beats the heck out of me! In the grand structure of things, this particular provision promises to raise a very, really small sum of money.
- Low-to-moderate risk account
- A chart displaying the illustration of the above is given below
- Is It Worth the Price
- Low quality old out-of-date websites in the top 10
- What kind of information the financial adviser should give you
- Expenses were at the reduced end of targets without travel costs or other large what to pay
- 10% penalty may apply
Given that less than 3% of U.S. 250,000 a calendar year and the median price of the home in the U.S. 150,000, I am not sure how this is going to increase much money at all. It shall affect a relatively small number of individuals on an even smaller number of transactions.
But that will bring up another point – and this is a detailed as I am going to come to a political discussion. It’s Only A Little Tax – You ARE ABLE It! At the event, my indicates the girl asking the question and also to the audience had nothing in connection with the size of the tax or if it even existed. She was there to learn how to be a better real estate investor. She had an opportunity to network and learn from 450 other investors from all over the national country. Too often, we focus on the negative and not the positive and the negatives tend to get us much more fired up!