3.8% Tax on Homes Sales to Pay for Obamacare?

Many folks have been receiving alarming emails which have gone viral regarding a 3.8% tax on real estate sales beginning in January, 2013. Fortunately, this is only a rumor. True, there is a new 3.8% tax created under the new healthcare legislation, a.k.a. Obamacare. However, it applies to a small group of taxpayers, not to the purchase of a home. Let's take a look at the myth vs the truth.

The 3.8% tax will apply to the "unearned" income of high income taxpayers, that is, those filing "single" with an adjusted gross income above $200,00 and those filing "married" with an adjusted gross income above $250,000. Funds from the tax will be applied to Medicaid.

In a nutsehll, unearned income or
net investment income, is the income
that an individual derives from investing
his/her capital. This includes capital gains,    
rents, dividends and interest income. The
tax is then imposed on the net gained after
expenses for earning the income is deducted
from the income, hence it's name
"net investment income".

Under current law, the net or capital gain ($250,000 for an individual and $500,000 for a couple) from the sale of a home is already excluded from any tax. This does not change under the new healthcare legislation.

You can read about this in greater detail at realtor.org

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