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3.8% sales tax on home sales starts 2013

Discussion in 'Politics, Elections & Legislation' started by BAD 303, Feb 9, 2012.

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  1. BAD 303

    BAD 303 Active Member

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    This sales tax starts in 2013 thanks to a provision in the health care law. Another liberal attack on home owners and people that have spent their money wisely. Another example of stealing from those that have worked for something and giving to those that have not and won't. Thanks Hussein. Another Socialist idea.
     
  2. mrskeet410

    mrskeet410 TS Member

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    Barker steps in any right-wing dog turd thrown his way. He's done it enough he should learn to look more closely.

    How about a little documentation of this.
     
  3. K-EIGHTY

    K-EIGHTY Member

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    It's a 3.8% transaction tax on profits over the capital gains threshold. Example: A couple who sold their home would be subject to the 3.8% tax only if they made a profit of at least $500,000 on the sale, and the tax would apply only to the portion of that profit in excess of $500,000. I doubt very many of us will be fortunate enough to be significantly effected by this tax. If you sell your house and profit $600,000 on the sale, you would pay $3,800 on that $600,000 profit.

    Cheers.
     
  4. gdbabin

    gdbabin TS Member

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    Oh now you've done it... overcome rhetoric with the facts.


    Guy B.
     
  5. Tripod

    Tripod Well-Known Member

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    Iowa man!!
    Another thing designed to get the wealthy only so the rest of us will accept it.
     
  6. Joe Potosky

    Joe Potosky Well-Known Member

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    An additional tax is an additional tax.

    For those who are for increased taxes; check your phone/cell phone bills, electric bill, tax at gas pump, road tolls, county tax, school tax and the tax on whatevery else you buy each year and add up taxes paid.

    You will be surprissed to find what you pay in taxes outside of income taxes each year...

    How about just cutting the spending?
     
  7. 870

    870 Well-Known Member

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    Some of you guys buy all the spin there is, don't you?

    It's not a sales tax, and its certainly not specially targeted at home sales, as has already been explained.

    Everyone's gripping about the very richest paying only an effective tax rate of 15% and here you are bashing an attempt to tax those married taxpayers makingover $250,000 an additional 3.8% medicare contribution tax their unearned income?

    It applies to a whole lot of other things than home sales, and since the taxable gain on a sale of a residence is limited to only very large gains, not many of us will be impacted in that manner. Much more likely for people to be impacted because of their interest, dividends, stock sales, rental property sales etc.

    Why do you guys sensationalize the most unlikely scenario and ignore the much more likely situations that might impact you, assuming you make that much? Probably because you buy most things you read on the internet without any attempt to get the actual details.
     
  8. Kevin Fleming

    Kevin Fleming Active Member

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    870 - are you saying that the average Joe shouldn't be concerned about this issue, because it doesn't affect him? I think that is half of what's wrong with this country.

    K
     
  9. Steve W

    Steve W Well-Known Member

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    The average 15% tax rate on the rich represents 65% of total income tax.
     
  10. 870

    870 Well-Known Member

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    Kevin:

    I'm not saying that at all. I'm just pointing out how silly some of these posts sound if you know what is really involved. Why is it spun as a sales tax when its's not even close to such a thing? Why is the home sale issue raised so often, when it is much, much more likely for you to run into this tax on your stock sales, interest income, possibly rental income, gain on sale of a rental property, a business interest that you own passively, etc? In other words it is much more encompassing than all these home sales tax BS posts you read about here.

    Do you recall the recent statements by Warren Buffet about the wealthy paying only a 15% tax rate. That is because just about all of his income is capital gains. Also remember that those guys aren't paying any FICA at all on that income, while people that have to work have to pay on their wages. This is the other side of the issue you don't see posted here. This tax is targeted at those situations, but probably goes too far because the $250,000 married filer limit is too low, I think.

    Do I agree with it, I'm not saying that at all, just trying to point out what the facts are to get through most of the emotional BS that gets posted.
     
  11. 870

    870 Well-Known Member

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    Rick:

    I just don't like to see misleading information that obviously confuses (and is often designed to confuse) readers on this site.

    My question to you is: why do you seem to reinforce this misleading line of a sales tax on everyone's home sale, which it seems to me is designed to mislead most people, when you could be warning people that their bank interest, gain on the sale of that employer stock they received over the years, the income from that partnership they are in, dividends they receive, and rental income are all subject to this tax if they make over the income limit? Seems this is a much more accurate statement than the one that keeps getting posted here?

    The fact is a married couple with no other income would BEGIN to be subject to this tax when they sell their home for more than a $750,000 gain. It would be accurate to tell them the gain on their home could be subject to this tax, but in my opinion many, many more people will be impacted by getting their interest, capital gains etc taxed by the additional 3.8%. How come I never see those facts posted here?
     
  12. Stl Flyn

    Stl Flyn Well-Known Member

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    The usual problem with this whole political section. No credible information. Its all what you hear, or read on a political site, blog, etc., or personal perception, interpretation, or opinion. Post a link of the portion of the bill that states this as law, and let us determine the treat from ALL OF THE FACTS AND INFORMATION.
     
  13. 870

    870 Well-Known Member

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    Flyn:

    I'm giving you the facts from the law, not from some blog etc. Take a look here for some background.


    http://www.aicpa.org/Publications/TaxAdviser/2011/July/Pages/fava_jul2011.aspx
     
  14. Stl Flyn

    Stl Flyn Well-Known Member

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    870,

    I was not referring to you. It was more in reference to the original post. So thanks for the link. That is good information.

    I see how this affects investment income in the link provided, but did not see any information on home sales.

    I know this has come up before on this site, and I have read that the income limits are the same, but the transaction tax applies only to the amount over $500,000 plus the one time $250,000 exemption if taken. Totaling $750,000.

    My whole point, was as you have stated. The way it is posted originally is for political hype. Thats it. It was designed to look like everyone selling a home was going to pay a 3.8% tax on the profit of there home.

    As I have previously posted before, it is politically motivated deception.
     
  15. 870

    870 Well-Known Member

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    Flyn:

    You won't see any reference to home sales in the actual law because it is not specifically targeted at home sales, despite the internet chatter. It is targeted at investment and other unearned income. Taxable capital gains are investment income subject to the new tax. This is how a sale of your home comes into play. A gain on your home sale (assuming married filing) is excludable from income tax up to $500,000. Since the new tax only applies to gains that are already taxable, a couple has to have a $500,000 gain on the sale before it even possibly becomes subject to the new tax. They also have to be over $250,000 of modified adjusted gross income (MAGI). In my earlier example, if a couple had no other income or deductions but a $750,000 gain on the sale of their home, they would pay regular capital gains tax on $250,000 of the gain, but they would have no additional 3.8% tax from this new law since their MAGI did not exceed $250,000. Not a normal situation, but I'm trying to make a point.

    I agree 100% with your last statement. Anyone that refers to this as a sales tax on your home is simply copying and pasting something they did not take even 5 minutes to try to understand. That is not a statement in support of this tax at all, just a shot at those that continue to repeat misleading info.
     
  16. WS-1

    WS-1 Banned User Banned

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    What's really funny is that we, the supposedly well informed, continue in our protracted swan song while the communists slowly drain our blood through thousands of tiny little cuts.

    We're all just a bunch of sweaty little twats with big keyboards. Are there any fist fighters left?
     
  17. Stl Flyn

    Stl Flyn Well-Known Member

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    870,

    Could the one time exemtion of $250,000 of the sale of a main residence, be included in this if desired, or is this exemption going to be abolished at the time of implementaion of the new tax law?
     
  18. 870

    870 Well-Known Member

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    It won't be included because this new tax piggy backs on top of whatever investment/unearned income is already taxable under the existing tax law, it does not create any new taxable items. It is not a tax on home sales, it is an additional tax on whatever investment income is already taxable under the law. If certain home sales are already taxable, then they can come into play under the new tax. If the definition of taxable gains on the sale of your home are changed, whatever new taxable amount will then be what the 3.8% is based on. Again, this is because there is absolutely nothing in the new tax that even mentions a home sale. As long as you are over the base limits ($250,000 married), it is based on any taxable capital gain regardless of source.

    Remember when home sales had a cumulative limit and it got rolled over to your new home? If we went back to that for taxable home sales what ever was taxable under the regular law would then be eligible for the new tax also.

    I didn't catch that last question initially. I don't think the $250,000 (single) or $500,000 (joint) home sale exclusion will go away in relation to this law. Who knows about the future.
     
  19. gun fitter

    gun fitter TS Member

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    Again the point is missed by most everyone. I expect to sell my home in a few years and probably stick close to 400,000.00 in my pocket so the new tax won't affect me at all!

    I am concerned that this may be more of the progressives class warfare. Most of the homes that would fall in to this category are probably second homes of the rich. It will really hurt the real estate market in some of the pricy vacation areas. It will! I remember more of this class warfare when they created a luxury tax on big boats. It closed down a few us manufactures and the rich just took their money else ware to other countries to spend. when ever their is a tax that targets any group we all loose.

    870?
     
  20. 870

    870 Well-Known Member

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    Joe:

    Wish I could pocket that on my house! You're right, if you and the spouse sell your home and make a $400,000 profit, it won't cost you any federal income, capital gain, or dreaded new medicare 3.8% tax.

    Regarding your second paragraph, it is worse for those homes. Sale of a second home does not enjoy the exclusion from the existing capital gains tax your principle home enjoys. In that case, the entire profit is subject to the new tax assuming they are over $250,000 in MAGI.
     
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