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Selling your home in 2012 may avoid a Sur-Tax in 2013

January 24, 2011

You know how I love passing on the various tax tips I get…well, this one is like a secret that I was just made aware of!  As the health care act unfolds there seem to be many added value (NOT) items like this, so stay tuned.

 If you plan on selling your home at a substantial gain, take note as high profit sales after 2012 can trigger a special 3.8% Medicare surtax. What, really? Starting in 2013, the new health care law imposes 3.8% levy on investment income of singles with adjusted gross incomes over $200,000 and marrieds above $250,000. The surtax is levied on the smaller of the filer’s net investment income or the excess of AGI over the thresholds. Capital gains are treated as investment income. Thus, if you expect the surtax will hit you after 2012 and the gain on the sale of your home will exceed $250,000 if you’re single or $500,000 if married, gain over these amounts will bear an extra 3.8% tax. So it may pay handsomely to sell before the end of 2012. Also, the surtax can bite even harder on sales of second homes after 2012 as the home-sale exclusion doesn’t apply to them, so the surtax can hit the entire gain.

Let GAI ( help you with all of your tax and bookkeeping needs. We can help plan for any sur tax you may encounter. Call us today at 212-979-6830 or stop by for a visit. See you soon!

3 Comments leave one →
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