Do I have to pay federal sales tax when I sell my house?
October 9, 2014
Date: 01 Nov 2011
I received an email from a real estate broker that advised me that in 2013 a seller of real estate will have to pay a federal sales tax on the sales price. That this tax was part of the health care bill.
Any truth to this?
Date: 02 Nov 2011
There is some truth to it.
It is not a sales tax, but a Medicare tax.
The 3.8% tax will not be based on the sales price of real estate, but gains from the sale of real estate will be included in "investment income" subject to the tax.
The tax will only apply to taxpayers who have more than $200,000 ($250,000 for joint filers or $125,000 for married, filing a separate return) of adjusted gross income.
Congress may revisit the tax, probably after the Presidential Election, relating to general tax reform.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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