The National Association of Realtors has some tax advice for users of the internet: Don’t believe everything you read. There has been a recent flare-up of chain emails purporting that, come Jan. 1, all real estate transactions will be subject to a 3.8% federal sales tax. The problem: That’s not true. The basis for the rumors is the new 3.8% Medicare tax on unearned income, which will take effect next year (Sec. 1411). That provision provides the rumors with a kernel of truth: A very small number of taxpayers will pay a surtax on gain from the sale of a principal residence. The new tax will only apply to single taxpayers with a modified adjusted gross income (MAGI) in excess of $200,000 and married taxpayers with a MAGI in excess of $250,000 if filing a joint return, or $125,000 if filing a separate return. Those taxpayers will pay the tax on gain from sale of a principal residence, but only on the amount of gain that exceeds the thresholds in Sec. 121 ($250,000 for single taxpayers; $500,000 for joint returns).
If you have any other questions regarding real estate here in the NC and VA High Country feel free to contact Josh Johnson at any time. He is your source of information within the High Country Association of Realtors in the beautiful North Carolina Mountains. You can email him at Josh@AsheMountainProperties.com or reach him on his cell at 828-406-4495.