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justme
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2010 Oct 11, 3:59pm
Would you mind not posting such blatantly false headlines? There is no such "transaction tax" real estate transactions in the US, and there will be no such "transaction tax" in 2013 (added).
As the text says, there's going to be an additional 3.8% worth of capital gains tax on certain sales that involve high levels of capital gains and high-income individuals. That's about it. The facts of the matter may not be easily condensed into one catchy headline, but that is not an excuse for writing one that is utterly misleading.
I realize I'm being a bit grumpy here, but that headline is so bad you' think Karl Eff'ing Rove wrote it.
Agreed. That's like those idiots that call the estate tax a "death" tax. Headlines and spin phrases and sound bites have become the fashionable substitute for knowledge.
The headline is a question "?" not a false statement.
I heard the rumor,was shocked, and checked it out to see if it was true. Others may have heard the same rumor and might be interested in seeing if it is true. My friend said he would have to pay a $15,000 tax on the sale of his condo because of Obamacare. I think his tax would be more like $900.
This new tax will still have an effect on house prices.
HousingWatcher
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2010 Oct 12, 9:04am
"This new tax will still have an effect on house prices."
The tax does not even go into effect until the last day of 2013.
Agreed. That’s like those idiots that call the estate tax a “death†tax.
LOL! as they say in Tax Accounting, Your estate kicks in when you kick out!
Death is a taxable event, requiring filing of Form 706 due 9 months after death.
Estate or Death, its the same thing.
You may want to do some research on the topic, but this is what i found... so on a $400K sale, I guess a tax would kick in. More likely, im speculating here!, a witholding from sales proceeds paid to Treasury from escrow account. Will see how this all happens.
Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income, including the sale of single family homes, townhouses, co-ops, condominiums, and even rental income.
In February 2010, 5.02 million homes were sold, according to the National Association of Realtors. On any given day, the sale of a house, townhome, condominium, co-op, or income from a rental property can push middle-income families over the $250,000 threshold and slam them with a new tax they can’t afford.
This new ObamaCare tax is the first time the government will apply a 3.8 percent tax on unearned income. This new tax on home sales and unearned income and other Medicare taxes raise taxes more than $210 billion to pay for ObamaCare.
Additional Document: http://www.house.gov/budget_republicans/press/2010/hc-ed-final-7apr10.pdf
justme
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2010 Oct 12, 9:28am
TW, that blurb containing the words of the Congress Republicans is only marginally less wrong than the original headline.
Note the word "Congress Republicans". I expect them to exaggerate and lie about taxes, and yes, they did it again.
The LINKS (not the headline) that dhmartens posted DO tell the real story, although some decoding of the verbiage is required.
I stand by my first comment on this matter. This tax is a big nothingburger for 95+% of the population. It is a tax on the wealthy only.
I stand by my first comment on this matter. This tax is a big nothingburger for 95+% of the population. It is a tax on the wealthy only
.. living in bubble areas in general like Palo Alto, Menlo Park, Saratoga ! It would certainly have a bigger impact in our local region vs other states where prices are much lower.
From factcheck above.
An "empty nester" couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy.
Interesting stuff!
The person who died doesn’t pay the tax, it’s the inheritors getting a free money windfall from Dead Uncle Richie.
Thats right the dead dont pay taxes, their executor-trustee files the tax return and pays the tax from their estates assets. Fiduciary Tax Return Form 1041 due on April 15th.
justme
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2010 Oct 12, 10:03am
>>It would certainly have a bigger impact in our local region vs other states where prices are much lower.
But what is the impact going to be? I don't think anyone who fits the example cited is going to lose any sleep over paying $3800 more in taxes on a $600k capital gain.
I don’t think anyone who fits the example cited is going to lose any sleep over paying $3800 more in taxes on a $600k capital gain.
LOL! im a penny pincher, i watch every dollar earned and spent. $3800 pays a years worth of CableTV/Internet/home supplies/ utilities/ garbage collection and Cell Phone bills.
We will see how this pans out.
tatupu70
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2010 Oct 12, 10:28am
LOL! im a penny pincher, i watch every dollar earned and spent. $3800 pays a years worth of CableTV/Internet/home supplies/ utilities/ garbage collection and Cell Phone bills.
We will see how this pans out.
Do you fit the profile? $600K capital gain and $250K income with no kids?
Do you fit the profile? $600K capital gain and $250K income with no kids?
If I sold today, yes, I would be getting bubble capital gains and paying bubble taxes.
Thats right the dead dont pay taxes, their executor-trustee files the tax return and pays the tax from their estates assets. Fiduciary Tax Return Form 1041 due on April 15th.
Once again, people are spinning. Currently, the first $1mill is *exempt* from this tax, and has been for almost 9 years. In fact, in 2009, $3.5mill was exempt. So, again, it's not a death tax; 90% of the population will die with less than $1mill to their name.
Only a small percentage of our population will ever have their estate taxed. If they have that much to their name, whoever benefits is getting a windfall even after taxes.
Thats right the dead dont pay taxes, their executor-trustee files the tax return and pays the tax from their estates assets. Fiduciary Tax Return Form 1041 due on April 15th.
Once again, people are spinning. Currently, the first $1mill is *exempt* from this tax, and has been for almost 9 years. In fact, in 2009, $3.5mill was exempt. So, again, it’s not a death tax; 90% of the population will die with less than $1mill to their name.
Only a small percentage of our population will ever have their estate taxed. If they have that much to their name, whoever benefits is getting a windfall even after taxes.
Actually, right now (2010), there is no estate tax. People can die and leave $1B to their heirs and none of it is taxed (in terms of an "estate" tax). In 2011, it is scheduled to go to $1M.
Personally, I believe the estate tax should be a sliding scale, like the first 3 million is exempt. Adjusted for inflation, of course, so it goes up almost every year. Then the amount from 3-10 million is taxed at 33%. 10-20 million taxed at 66%. Anything over 20 million is taxed at 95%. Spouses are exempt from paying estate tax, provided they have been married for over 15 years. 50 million is exempt for 10-15 years, and 20 million exempt for 5-10 years. Less than 5 years and no exemption. Children/grandchildren are not.
If you are the sole heir to a one billion estate, you only get to keep 3 million plus 4.62 million plus 3.33 million plus 49 million. Only 59.95 million. Boo-hoo. I don't think you will have to go get a job. But if you have three siblings, then it is only 14.99 million. Still wont have to get a job but your kids probably will. And that is the point. Your kids need to figure out a way to support themselves because if they don't they end up like Paris Hilton. And that isn't helping our society one bit.
Taxing like this is the only way to slow down the aristocratic society we have developed. If you are born a Rockefeller you still probably never have to work a real job in your life and no one in that family has made any new money (that isn't simply the gain of investment of inheritance) in over 100 years. How is that different from being born into a royal family?
Interestingly, both Buffet and Gates both promote this type of estate taxing system.
justme
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2010 Oct 13, 7:39am
Interestingly, both Buffet and Gates both promote this type of estate taxing system.
I guess they do or did, but then why has Bill Gates squirreled away his fortune in some archaic foundation, the main purpose of which appears to be avoiding estate taxes?
Perhaps Bill Gates thinks only OTHER rich people should pay estate taxes?
>>It would certainly have a bigger impact in our local region vs other states where prices are much lower.
But what is the impact going to be? I don’t think anyone who fits the example cited is going to lose any sleep over paying $3800 more in taxes on a $600k capital gain.
It's certainly not going to influence many peoples buying decision, or how much they'll bid.
"Oh, but honey, in 10 years we might have a $100,000 capital gain that we'll have to pay $3000 tax on. Maybe we should bid $3000 lower?"
Yeah right. This is the kind of idotic thinking that comes out of people like Larry Kudlow.
Comments 1 - 19 of 27 Next » Last » Search these comments
http://www.snopes.com/politics/taxes/realestate.asp
http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/
"..We’ve been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false.
The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home."
"..So there you have it. The sort of people who would have to pay the tax might include, for example:
A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
An "empty nester" couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy."
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