Will You Be Thumped by the New Tax?
The holidays have come and gone. And while the season probably provided us with a welcome respite from the rigors of the daily grind, it’s now time to turn our thoughts from sugarplums and champagne. That’s right. We must ease out of the holiday zone and once again focus on serious business…at least for a few minutes.
If you own real estate, one of the more serious topics occupying your mind is that of a particular new tax. You know, the one targeting certain investment income. If you recall, Congress approved the tax way back in 2010. It’s purpose: to help cover the expenses of President Obama’s healthcare and Medicare overhaul programs.
It’s too late to do anything but grin and bear it. The tax law went into action on January 1. So be prepared. It definitely will have an impact on some real estate transactions. For those that qualify, a 3.8% tax will be assessed on income derived from interest, dividends, rents, and capital gains.
There’s a rumor floating around that every single deal will feel the tax sting. This is pure fantasy. Individuals must meet a number of criteria in order to qualify for taxation. Not everyone will satisfy the requirements. For instance, in order to qualify, a person’s adjusted gross income (AGI) must exceed $200,000. Couples filing a joint return must have an AGI above the $250,000 mark.
To find out where you fall in the taxation scheme of things, it’s best to consult an expert who understands the intricacies of the law — be that a tax attorney or CPA. The main point here is to avoid waiting until the midnight hour to get on top of the situation. As with most things in life, preparation is the foundation of success in the taxation realm.
Now remember, there’s absolutely no need to be alarmed by the new tax. With the real estate market rebounding in a big way, it’s still prime time to buy a choice property – as an investment or a home. The opportunities abound.
If you’re ready to discover the latest opportunities in the Beverly Hills real estate market, I’m ready to make it happen. Call or email today.
Back soon.
Terre Steinbeck
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