By Daphne Hendricks and Robin Butle
Q What is the 3.8% Medicare Tax? Is this a Real Estate Transfer Tax?
A No, this is not a real estate transfer tax. That is a common misconception.
Q Will I pay a 3.8% tax when I sell my home?
A For an individual filer: If you sell it for a profit of more than $250,000, then maybe.
For joint filers: If you sell it for a profit of more than $500,000, then maybe. We recommend that you ask a tax advisor, this tax will depend on the mix of ALL the elements that make up your Adjusted Gross Income (AGI).
Q I own an investment property, will my rental income be included in my Adjusted Gross Income (AGI)?
A You are not subject to the 3.8% tax if your AGI does not exceed $200,00 (individual filer), or $250,000 (joint filers).
If your income exceeds these earnings levels, then you may be subject to the 3.8% tax. Remember your AGI includes only Net, not Gross, Rental Income.
Again, we recommend that you speak with a tax advisor.
Q When does this go into effect?
A January 1, 2013
Q Why is this tax called the Medicare Tax?
A Passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund President Barack Obama’s health care and Medicare overhaul plans.
More information can be found on the National Association of Realtors Website:
Daphne Hendricks & Robin Butler
Prudential PenFed Realty
361 Maple Avenue Suite 100
Vienna, VA 22180
Daphne's mobile: 703-328-7290
Robin's mobile: 703-932-9299
Welcome to our first post! We are eager to hear from you! Please email your real estate questions to email@example.com. We've begun with answering the very basics of this new 3.8 % Medicare tax, and how it affects real estate. Daphne and Robin, Realtors at Prudential PenFed Realty, specialize in Residential Real Estate in Vienna, with a combined experience of 20+ years. Both Daphne and Robin have property management experience as well, and have worked with investors.