Obamacare levies a 3.8% real estate tax????????
FALSE!!!!!!!!!!!! PANTS ON FIRE FALSE!!!!!!!!!! EARNING A PLACE IN HELL FALSE!!!!!
CUT YOUR TONGUE OUT, MAY YOU BURN IN HELL FALSE!!!!!!
This outright lie is so irresponsible it is akin to yelling FIRE! in a crowded theater.
Firstly, the tax exemption on the sale of your house that was in place before Obamacare STAYS THE SAME. There is a longstanding tax exemption on the sale of your primary residence. $500,000 for couples; $250,000 for single
Obamacare does NOT touch this tax exemption for the sale of your primary residence.
What does it all mean?????
Let’s say you’re married (filing taxes with your spouse) and you bought your house for $100,000. You are allowed $500,000 in PROFIT when you sell your house before any taxes kick in. That means you’d have to sell your $100,000 house for at least $600,000!!!!!! (OMG, I need a benefactor for this art project. Talk to me.)
“The surtax does not interfere with the current tax-free exclusion on the first $500,000 (joint filers) or $250,000 (single filers) of gain you make on the sale of your principal home.” (bankrate.com)
Obamacare doesn’t change any of that. So what does change? The LA Times does a good job explaining a change in a capital gains tax that will affect VERY FEW Americans. Let’s look deeper.
OBAMACARE IN REAL LIFE:
Okay, so let’s say you and your spouse sell your $100,000 house for $625,000. (Good on you!) You earn $525,000 in PROFIT — that’s pure P-R-O-F-I-T. Got that?
So the first $500,000 in PROFIT is not taxed ($250,000 for single). NADA, NOTHING, NO TAX! TAKE A TRIP TO EUROPE! as per the longstanding exemption for profit on the sale of your home.
Now you have $25,000 additional profit over the $500,000 tax exempt profit for you and your spouse.
Are you taxed 3.8% on the $25,000??? Well, probably not.
Let’s say that you and your spouse’s combined income is $175,000. (I’ll take it!) But this year you have to add the $25,000 profit from the sale of your house that is over the $500,000 profit exemption. That brings your income to $200,000.
You and your spouse still do NOT qualify for the 3.8% tax. You would have to make over $250,000 as a couple.
So let’s look at an example of a couple earning over $250,000/year.
Okay, you and your spouse make $240,000/year when you combine your incomes. But this year you have to add the $25,000 profit from the sale of your house that is over the $500,000 PROFIT exemption.
That brings your income to $265,00/year. Remember, no matter how much money you and your spouse earn, Obamacare exempts everything under $250,000 for a couple.
But what about the $15,000 over $250,000 that you made this year? Yes, you would pay an additional $570 on the $15,000 over $250,000 in earnings. That is five hundred and seventy dollars.
You and your spouse sold your $100,000 house for $625,000.
You earned $525,000 PROFIT on the sale of the primary residence.
$500,000 of profit is EXEMPT from tax as per the longstanding IRS exemption.
You add the $25,000 that is not exempt to your total income for the year.
Total income below $250,000 for a couple NO ADDITIONAL TAXES
$15,000 over $250,000 income, you pay $570.
So you have earned $265,000/year; you pocketed $500,000 from the sale of your house tax-free; and you paid additional $570 in taxes.
What’s the problem here?