The "Medicare" TAx
November 30, 2010
I had a question yesterday from a prospective seller concerning the 3.8 percent tax on home sales that was part of the Health Care and Education Reconciliation Act of 2010. I had read about this "Medicare" tax, but other than believing that it was not effective in 2011, I was pretty fuzzy about what it was going to impose on home sellers.
I had saved an article by Benny Kass that was printed in the Inman News. Here are some of the provisions of this tax.
1) The tax is based on income and profit. It does not apply universally to all home sellers.
2) It is not a sales tax, nor does it impose any transfer or recordation tax.
3) The moneys received will be allocated to the Medicare Trust Fund, which is part of the Social Security system.
4) If your individual income is less than $200,000 (adjusted gross income), you are not subject to the tax.
5) f you are married and file a joint tax return with your spouse, the law will apply only if your income is more than $250,000.
6) If you are married and you and your spouse file separate tax returns, the income threshold is reduced to $125,000. (The law spells out all of these thresholds very specifically.)
7. If you are subject to this tax, you will probably need an accountant to determine the tax you might owe.
8) In any event, the "Medicare" tax does not take effect until January 1, 2013.
I had a question yesterday from a prospective seller concerning the 3.8 percent tax on home sales that was part of the Health Care and Education Reconciliation Act of 2010. I had read about this "Medicare" tax, but other than believing that it was not effective in 2011, I was pretty fuzzy about what it was going to impose on home sellers.
I had saved an article by Benny Kass that was printed in the Inman News. Here are some of the provisions of this tax.
1) The tax is based on income and profit. It does not apply universally to all home sellers.
2) It is not a sales tax, nor does it impose any transfer or recordation tax.
3) The moneys received will be allocated to the Medicare Trust Fund, which is part of the Social Security system.
4) If your individual income is less than $200,000 (adjusted gross income), you are not subject to the tax.
5) f you are married and file a joint tax return with your spouse, the law will apply only if your income is more than $250,000.
6) If you are married and you and your spouse file separate tax returns, the income threshold is reduced to $125,000. (The law spells out all of these thresholds very specifically.)
7. If you are subject to this tax, you will probably need an accountant to determine the tax you might owe.
8) In any event, the "Medicare" tax does not take effect until January 1, 2013.
posted by shirley harry at 9:18 AM
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