yellow pages news jobs events calendar movie times
Rocklin and Roseville Today Events Calendar
    (Independent and Locally Owned)

Housing Tax Rumor





By now, everyone has heard the rumor home sales will be taxed to help pay for Obamacare.  Here are the ten things you need to know about the 3.8 percent tax:

  1. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you'll never pay this tax at the time that you purchase a home or other investment property.
  2. You'll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year's gross income.

  3. If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

  4. The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).

  5. When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.

  6. The tax goes into effect in 2013. If you have investment income in 2013, you won't pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

  7. In any particular year, if you have no income from capital gains, rents, interest or dividends, you'll never pay this tax, even if you have millions of dollars of other types of income.

  8. The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.

  9. It's true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

  10. The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.


I hope this makes it clear this is not a sales tax on real estate.  If you have any questions or comments please send me an email to
juliej@jalone.com.

Print

Julie Jalone, wife and mother living in Rocklin, is an experienced professional Realtor ® serving
the Greater Sacramento area including Placer, El Dorado, Yolo and Yuba counties.

Julie may be reached online at www.jalone.com or by calling (916) 276-6883
Check out her daily web blog: Keep it Real in Sacramento



Placer County News Headlines

Roseville Police Bust Nets $40,000 Cash, Guns and MethRoseville narcotics detectives suspected that Joshua Holmboe was both selling illegal drugs directly to users and also supplying lower-level drug dealers, and that some of those drugs were then being sold and used in Roseville.

Governor Brown Signs Bill to Help Disabled VeteransLegislation sponsored by George Runner to protect California's disabled veterans has become law. Senate Bill 1113, authored by Senator Steve Knight (R-Antelope Valley),

Roseville Chamber Events October 2014Roseville, CA -- The Roseville Chamber of Commerce featured events for the month of October 2014.

Sacramento Area Gas Prices Down AgainAverage retail gasoline prices in Sacramento have fallen 2.4 cents per gallon in the past week, averaging $3.61/g yesterday, according to

Nontraditional Employment for Women Event in RocklinSierra College seeks sponsors for the second Nontraditional Employment for Women (NEW) event on October 17

$160,000 for Scholarships Raised at WJU Anniversary GalaJessup's Gala Honored 75th Anniversary and those who brought the Growing University to Placer County

Wakefield Gets SA Chapters RunningMy featured person this week, Margery Wakefield, of Lansing, Michigan, has had lifelong struggles with schizophrenia, a mental health disability.

Overcharged Tax on an Auto Purchase? Get Your RefundUnfortunately, I've been hearing from my constituents that the Department of Motor Vehicles is overcharging tax on their vehicle purchases.

Ford Focus Sportier and More RefinedFord redesigned the Focus two years ago and has produced a fairly sporty and refined compact car that has received strong statements of approval from prominent auto publications.

King Fire: Rain Gives Firefighters Upper HandCalifornia Fire Update: Rainfall across Northern California aided firefighters in their efforts towards containment of the 3 remaining wildfires in California. Smokey conditions persist in Roseville and Placer County.

Roseville Man Arrested in Arson InvestigationRobert De Los Santos, age 43 of Roseville, was arrested on suspicion of arson in connection with the September 23 fire.

Get Help When Buying a New HouseMagnumOne Realty agent/owner, Julie Jalone, gives some valuable advice to Sacramento and Roseville home buyers who are considering new construction for their next house.


more news