If are considering selling a property now versus next year. The following news regarding a new tax may help you decide (and make sure you consult your CPA!);
For tax years starting on or afterJanuary 1, 2013, the 2010 Health Care Bills impose a new 3.8% Medicare Tax on net investment income in excess of specified amounts. The new tax on investment income applies to adjusted gross income above $200,000 for single filers and $250,000 for joint filers.
This new tax is a flat tax on investment income above $200,000/$250,000 threshold. Investment income would be defined as:
- Dividends
- Rents
- Royalties
- Interest (except municipal-bond interest)
- Short and long-term capital gains
- The taxable portion of annuity payments
- Income from the sale of a principal home above the $250,000/$500,000 exclusion
- A net gain from the sale of a second home
- Passive income from real estate and investments in which a taxpayer doesn’t materially participate, such as a partnership.
The tax doesn’t include payouts from:
- Regular or Roth IRA
- 401 (k) plan or Pension
- Social Security Income
- Annuities that are part of a retirement plan
- Life insurance proceeds
- Municipal-bond interest
- Veterans’ benefits
- Schedule C income from business
For more information contact us or visit http://www.realtor.org/small_business_health_coverage.nsf.