Hi Everyone. Well, after 15 years the RV-Dreams Community Forum is coming to an end. Since it began in August 2005, we've had 58 Million page views, 124,000 posts, and we've spent about $15,000 to keep this valuable resource for RVers free and open. But since we are now off the road and have settled down for the next chapter of our lives, we are taking the Forum down effective June 30, 2021. It has been a tough decision, but it is now time.
We want to thank all of our members for their participation and input over the years, and we want to especially thank those that have acted as Moderators for us during our amazing journey living and traveling in our RV and growing the RV-Dreams Family. We will be forever proud to have been founders of this Forum and to have been supported by such a wonderful community. Thank you all!!
This morning, I received a copy of the following email which is being passed around, so I thought I would address it here.
"Will you ever sell your house? Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That's $3,800 on a $100,000 home etc. When did this happen? It's in the health care bill. Just thought you should know. SALES TAX TO GO INTO EFFECT 2013 (Part of HC Bill) Under the new health care bill - did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013 If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes."
I edited out the irrelevant portions, but the bottom line is this.
Yes, the healthcare bill really does include a 3.8% tax that starts in 2013, but it is not as broad as the email indicates. The email is misleading and some statements are downright false.
There is a 3.8% Medicare tax on taxable investment income (which may include capital gains on the sale of a home) for those that have modified adjusted gross income of $250,000 for couples or $200,000 for singles. It is NOT a sales tax on the sales price of houses.
Under current law, couples may exclude $500,000 of profit on the sale of their principal residence and singles may exclude $250,000 of profit. The homeowner must have 1) lived in the residence 2 of the last 5 years, 2) not excluded profit from another sale within the last two years, and 3) there are certain rules if the home has been used for business purposes.
The additional 3.8% tax only applies to capital gains over and above those amounts (which will also be taxable at capital gains rates). AND it only applies IF the taxpayers have over $250,000 in modified adjusted gross income for the year for couples or $200,000 for singles.
So, if you don't have those levels of income, don't worry about the extra tax at all.
If you do have those levels of income, only worry about the extra tax IF you will be making a profit on the sale of your home over $500,000 ($250,000 for singles). Then, you might have to pay the additional 3.8% tax on the excess amount over $500,000 ($250,000 for singles).
Hopefully, that helps clarify things.
Note: If responding, please stay on topic. This one could get way out of hand if we let it.
This is a great example of how you need to vet what you read on the internet. Scare tactics abound out there. Thanks Howard for clarifying the truths from the not so true.
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janieD 2007 Dodge 3500 DRW 5.9L 2010 Excel Limited 30RSO Full Timing starting June 2010 Blog: www.flamingoonastick.blogspot.com
