Add Up Another Internet-Email Hoax!

Fear mongers continue to spread the rumor that the new 3.8% tax in the health care reform bill will suck the equity right out of your house! It goes on to say that the National Association of Realtors is fighting this provision. Neither of these statements are true but it they are sure to ignite a firestorm of frantic emailing back and forth between unsuspecting homeowners who see sure-fire poverty in their future. It simply is NOT TRUE. Is there a new tax of 3.8% on the transfer of some real estate, YES! Will it catch you in your own transaction? Very unlikely! First of all you would have to have over $250,000 in GAIN (not sales price, gain = the difference between what you paid for the house and what you sold it for minus numerous factors. So you paid $200,000 for your house and sell it for $300,000 and put $20,000 into a kitchen remodel the gain is $80,000 or 300k minus 200k minus 20k.It makes no difference if you own it free and clear or not. The loan amount doesn’t figure in). The level goes to $500,000 for couples filing jointly. Again that is gain, not sales price. Consequently this will only affect really high priced sales and also investment properties. Of course, I am not an accountant. I suggest you investigate further at the link below released by the National Association of Realtors trying to quell the panic and educate homeowners. They are the very group the email falsely accuses of fighting this tax. Just because you got it in an email it doesn’t make it TRUE! This link goes into much greater detail and does a better job of explaining this whole concept:

NAR Article: “3.8% Tax: What’s True, What’s Not”

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Fred Adams