Happy 4th of July


The US Supreme Court upheld the Patient Protection and Affordable Care Act of 2010.

Q:        Does the new health care law impose a 3.8 percent tax on profits from selling your home?

A:         No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won’t be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few — those with high incomes from other sources.

Please read a very detailed analysis by clicking here, as written by FactCheck.org a nonpartisan, nonprofit “consumer advocate” for voters.

FactCheck.org explains:

The sort of people who would have to pay the tax might include, for example:

  • A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
  • An “empty nester” couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy.

However, a typical home sale in Las Vegas Valley would not incur the tax.  In March 2012 in the Las Vegas Valley, for example, the average sales prices as reported by b Forrest Barbee, Corporate Broker, Prudential, Americana Group, REALTORS®, were

  • REO . . . Ave Price – $132,635
  • Short Sales . . . Ave Price – $138,085
  • Classic Sales . . . Ave Price – $205,672

These would not generate a $250,000 profit, and so none would be subject to the tax.  All sellers should consult with a tax consultant of their choice.

Questions:  darren@dwelshlaw.com