The new Obama Health Care Law has buried within it a "Health Care Tax" on taxable income generated from the sale of a personal residence, second home, or investment property. Democrats in the final hours before passage of the Health Care Reform Act inserted a tax provision targeting "high" income persons.
If you are an individual with annual income in excess of $200,000 or a married couple in excess of $250,000, you may be subject to this new "3.8% Health Care Tax" on the taxable income from the sale of a personal residence, second home, or investment property.
The 3.8% Health Tax is computed on the sale of a personal residence on that portion of the gain which exceeds $250,000 for an individual or a married couple's portion of gain which exceeds $500,000. Keep in mind that the 3.8% tax applies only if the seller meets the annual income guidelines above. Otherwise, only the normal federal capital gains tax would apply if any.
On the sale of investment or second home properties, the new 3.8% Health Care Tax is applied to all taxable gain in addition to the normal capital gains tax if the annual income of the seller meets the guidelines shown above.
It's clear that this tax will only apply to a few high income tax payers. However, once incorporated into the tax code, it's there for later amendments. Be sure to contact your tax advisor if you think the new Health Care Tax might apply to you.
It's so much easier to stop this type of creeping taxation before it passes. Once on the books, they have a tendency to grow as law makers see fit.
Don't forget that the Texas State Budget expects a large shortfall. Be sure and let your representatives know that a state tax on gain from a "property transfer or sale" is not acceptable.
HAR Board Elections are open for voting through 8/2 (5PM). Be sure and vote for your candidates. I'd appreciate your vote for John Shellington in the Small Office Category.We need a strong voice in Austin during the coming legislative session.
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