Home Sellers and the New Health Care Law Tax Implications
Lots of equity could mean a capital gains hit!
Now that the new Health Care Law is in full swing, here's the highlights as it relates to home sellers with large capital gains.
There are two main qualifiers.
1 - Applies to home owners who earn more than $200,000 a year, if you are single, or $250,000 a year if you are married.
2 - The tax will only be levied on capital gains over and above the current thresholds for a single person of $250,000 of gain, and $500,000 of gain if you are married, when selling your personal residence.
It is my understanding that the tax will apply to investment property when it is sold or disposed off.
So, in addition to the existing capital gains rate, if you meet the two qualifiers above, then you will be exposed to the new tax rate of 3.8% of the net total capital gain.
Please discuss this with your account, this is not tax advice and is provided for information purposes only.