Yes, you read that correctly. Among a host of other grenades buried in the 2,300 page health care reform bill was a section enabling a federal tax on some real estate transactions. Why is this the first time you are hearing about this? Believe it or not, most members of Congress voting on the Bill did not know what, exactly, was included in the 2,300 page monstrosity. Some may recall Nancy Pelosi’s famous line, “We have to pass the Bill, so that you can see what’s in it.” Well, she was right. It can be a bit confusing at first, but here is who’s in danger of owing another 3.8%:
Who is going to owe?
If you meet both of the requirements below, you may be liable for the additional 3.8% Federal Tax:
(1) The sale of your property results in a gain of $500,000 or greater.
(2) Your income is $200,000, or more, for a single seller or $250,000, or more, for a married couple
This tax is on top of the capital gains tax you will already be paying. A $500,000 or more gain in San Carlos will affect more than a handful of San Carlos families. Many families that bought in the mid to early 90s in San Carlos have most likely already made a minimum $500,000 gain. If those same families meet the income requirements, they will be coughing up another 3.8% through escrow starting in 2013.