Realtors Say Despite Efforts, Tax Rumor Keeps Spreading

Misinformation being passed along over the Internet and email have are throwing some prospective home sellers into a panic, but real estate trade groups reassure that very few owners will actually be affected by a new tax taking effect in 2013. The 3.8 percent levy on home sales was buried in healthcare legislation two years ago, but there is a misconception that it will be applied across the board. In actuality, the tax will only be on investment income for high-net-worth households that make a huge profit on the sale of a residence. Specifically, that means couples who earn $250,000 annually or individuals who make $200,000 a year or more — and then only if the transaction rakes in greater than $500,000 in profit for a married couple or $250,000 for a single seller. Even with that big of a profit, the National Association of Realtors says there still are other income and tax particulars that are considered before the 3.8 percent tax is triggered. NAR recommends that its members avoid coaching their clients on the tax because there are so many individual factors to be taken into account. Instead, the organization has published a brochure on how the tax works. It is available online at http://bit.ly/bhS8H6. | Read More