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I read “The 3.8% Tax Real Estate Scenarios & Examoles” and have a question about aplication. I saw nothing that addressed a couple or more likely a single retired person who is selling their principal residence and who has a retirement income of less than $200K. This is a likely scenario for thousands of people who bought homes years ago and are down sizing. Does this 3.8% tax apply to them?
Jack Gelke
John, let me reply based on my understanding but you’ll want to get a definitive answer from a qualified tax professional. If the individual’s adjusted gross income (AGI) is under $200,000, then they wouldn’t be subject to the 3.8 percent tax on investment income, even if they sold their house and realized a gain of $250,000 or more. To be subject to the tax, they have to have an AGI of $200,000 at a minimum. If they don’t meet that threshold, then the fact that they sold their house for $250,000 or more isn’t an issue. The same applies to a married couple, although the numbers change. If the couple together has an AGI of under $250,000, then they wouldn’t be subject to the tax even if they sold their home for a gain of $500,000 (that’s gain, not sales price). But you need to verify that with a qualified tax professional.
I wonder if your organization is aware that a political group is using your organization to promote misinformation on the 3.8% tax in the Affordable Care Act? The link used is: http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home ? The information in the email I received says that ALL sales of homes will be subject to this tax, and makes it sound like retirees are being targeted. But worst of all, to me, they are referencing your organization as “not pleased with this new tax,” and “working to get it repealed…”
That point of view doesn’t appear on your website as far as I can tell.
Thanks for your note. You’re correct that NAR is not working to get the provision repealed. NAR has developed material to help real estate proferssionals understand how the tax works, but it is not advocating for its repeal. If you’d like some info on how it works, you can find a video, FAQ, brochure, and bullet points on it at this link: http://www.realtor.org/articles/new-summary-explains-the-38-tax Thanks again for your note.
As a successful realtor, whose annual income is considerably more than the numbers you show in the NAR Annual Realtor Profile report, I grow rather weary of reading NAR essays of “30 under 30” and other articles concerning real estate agents who are, using an idiom we say down here in Texas, “Hardly dry behind the ears.”
I believe I read some where in one the NAR Annual Realtor Profiles, that the average tenure for a realtor was about three years. I would just surmise that, maybe not your selected, but many of the “30 under 30″ could, and will, fall into that category.
Now, why not write articles about “50 Under 60” or, perhaps agents in my age category, “60 Over 60”?
Looking at your realtor profile statistics, you state that the median age for realtors is 57. A Google search, when looking for the number of licensed real estate agents in the United States, gives me the number of 517,800 agents. If one half of that number is over the age of 57, that means that there are 258,900 agents from age 57 and up, including Yours Truly. And, I would be willing to bet my next commission check that most of the agents, in this age range, create a bulk of the real estate sales and will also show the greater number of years in the business. I know that this is certainly true in my brokerage, which numbers more than 400 agents.
When a client is looking to sell one of their most valuable possessions, a house, and they are in the age bracket of say, 30 to 60 years of age, I rarely, if ever, see that homeowner hiring an agent under the age of 30 years, unless that Agent is a relative, or a friend of a friend. No, the selling homeowners are looking for age, experience, and maturity.
Most young people I know, under the age of 30, are much more interested in other items of life, than in selling someone’s property. These items of life would include dating, partying, getting married, raising a family. Those particular items of life are not as prominent among those of us whom the public, and probably NAR will describe as “Senior Citizens.”
So let’s see some articles about those of us who actually support NAR, and the other real estate associations throughout the country, long term, with our real estate agent tenure and our many more years of experience. I believe we deserve the recognition just as much, or more, than the “Under 30” crowd.
As a Broker for 35 years now, and having completed over 4,000 written appraisals to date, in the Queens, New York areas, I am experiencing the same buying frenzy going on now that I did in the early 1980′s. You know, with Long Island Taxes being so high, and the flood insurance rates going through the roof after Hurricane Sandy,
many buyers are flocking back to their old neighborhoods. In addition since rents average $3,000 monthly for three bedroom apartments,and Residential homes all in the $1.5-$2.5 Million ranges in Williamsburg and Greenpoint Brooklyn, tenants & buyers are flocking to my areas. They include Middle Village, Ridgewood, Glendale, Maspeth, Rego Park, and Forest Hills.
Basically low taxes, no flood zone area, top rated schools, and an average of 20 minutes to Manhattan with a car or Express buses.
This is a welcomed trend, and nice to speak about since Queens, New York is not mentioned so often.
Since December 2013, Homes listed, are sold in 48 hours, three days, a week, or 1 month the most. And they are selling within 2,3, and 4% of the asking prices.
Thank you Real Estate Magazine.