While it is true that there is a 3.8% tax on profits from the sale of real estate over the capital gains threshhold, it is not true that it imposes a tax on all home sales.
Much of the information that is being cast around the internet email world is mis-quoting the issue, and so is providing more bad information. SNOOPES says it best; “this is a complicated section of a complicated piece of legislation, and the 3.8% Medicare tax has been frequently misreported as amounting to a 3.8% sales tax on all real estate transactions.”
As I understand the new tax rule it will generally affect a individual that makes more than $250,000, or couple that makes more than $500,000, on the sale of their home. So… it is 3.8% tax on the portion of the profit over $250,000, or $500,000 for a married couple. Now that’s on the gain, not sales price. Most folks just won’t be impacted, and those that are will be classified as high earners.
Upside: Not all of the information spread via emails is TRUE!
GREAT INSIGHT LOUIS! IF PEOPLE WOULD ACTUALLY PUT IN A LITTLE BIT OF TIME TO RESEARCH SOMETHING LIKE THIS ON THEIR OWN INSTEAD OF BELIEVING THE FIRST OPINION THAT COMES OUT OF A “TRUSTED” PUNDIT’S MOUTH THEN WE WOULD SEE A LOT LESS MISPERCEPTIONS.