Monday, September 9, 2013
WHAT A CROCK
I hope I didn’t come off like a drunken liberal Democrat at the bar of a local restaurant last Friday night (while at some point in my life I have been all three, I certainly was not any of thesel ast Friday), but I couldn’t help it.
I overheard a group sitting near me spewing the nonsense that Obamacare includes a “federal sales tax on the sale of your home”. I can’t believe that this garbage is still circulating. I correctly pointed out to the group that it is a total lie.
What they were talking about is the 3.8% “surtax” on net investment income for those who BO considers to be “wealthy”.
Beginning with tax year 2013, taxpayers with an AGI over $200,000 for Single and Head of Household filers, $250,000 for joint filers and $125,000 for married couples filing separately will pay an 3.8% surtax on net investment income. Net investment income is interest, dividends, net capital gains, annuities, royalties, rents, and pass-through income from passive S-corporations and partnerships less related investment expense deductions from Schedule A.
The $250,000 and $500,000 Section 121 exclusion on the sale of a principal primary residence still applies. So if the gain from the sale of your home is less than $250,000 or $500,000, as applicable, and you meet the Section 121
requirements, there is no federal income tax and no 3.8% “surtax” on the gain, and certainly no federal “sales tax” on the “sale price”.
It is true that if the gain on the sale of a qualifying home for a married couple who are “wealthy” is $600,000 the 3.8% “surtax” could apply to $100,000.
As I told the group on Friday - Obamacare is bad enough as written that you don’ t need to make up lies about it!