The 3.8% Tax on Real Estate
The tax is NOT a transfer tax on real estate sales and similar transactions. The new tax does NOT eliminate the benefits of the $250,000/$500,000 exclusion on the sale of a principle resident. Thus ONLY that portion of a gain above those thresholds in included in AGI and could be subject to the tax.
New Medicare Tax on “Unearned” Net Investment Income
The 2010 health care legislation did create a new 3.8% tax, “Unearned” Net Investment Income Tax, income from interest, dividends, rents (less expenses) and capital gains (less capital losses). But it applies only to a limited group of taxpayers. Those whose tax filing status is single will be subject to the new unearned income taxes if they have Adjusted Gross Income (AGI) of more than $200,000. Married couples filing a joint return with (AGI) of more than $250,000 will also be subject to the new tax. The (AGI) threshold for married filing separate is $125,000.
We would advise anyone that falls within this income to consult a tax professional. The amount of tax will vary from individual to individual because the elements that comprise AGI differ from taxpayer to taxpayer.
The new tax passed by Congress in 2010 with the intent of generating an estimate $210 billion to help fund President Barack Obama’s Health Care and Medicare overhaul plans.
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