The Truth about the 3.8% Real Estate Tax Imposed by the ACA

There are a lot of misconceptions about the new 3.8 percent Real Estate Tax Imposed by the Affordable Care Act beginning January 2013.

The first thing you need to know is that it applies to very few real estate transactions.

It only applies to individuals with Adjusted Gross Income (AGI) of more than $200,000 or to couples with Adjusted Gross Income (AGI) of more than $250,000.

Additionally, if you have lived in the home for 2 out of the last 5 years, $250,000 of the gain is not taxable for an individual and $500,000 of the gain is not taxable for a couple.

So this tax only applies to the capital gains above that threshold of gain.

This video helps explain how this new tax works:

NAR Director of Tax Policy Explains new medicare tax in video

Here are some specific examples:

3.8 Percent R.E. and Investment Tax Brochure

This tax is frequently called the Medicare tax as the proceeds from this tax are to be dedicated to the Medicare Trust Fund which would otherwise run out of money in the near future.

Consult your tax adviser for specifics on how this new tax might affect your particular situation.

If you need a private consultation on your particular real estate situation, call or text me (Vickie Hall) at 303-944-1153 or email me at






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