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Von Aldo
Is There Really a Home Sales Tax Hidden in ObamaCare?

Is There Really a Home Sales Tax Hidden in ObamaCare?

ObamaWell, yes and no, says the Tax Foundation. Apparently an article in the Spokesman-Review (Spokane, Wash.) created a big fuss on the web about "hidden" taxes on home sales tucked away in the ObamaCare legislation; the article implied all home sales. If you have HNW families in your practice, you might want to check out new taxes on the rich that is in the legislation.

Apparently, the newspaper got at least one tax detail wrong. Nevertheless, the big takeaway is that a 3.8% "unearned income" tax (read: capital gains) is in fact in the ObamaCare legislation. It's just that the new tax would hit only some people, you know, those evil rich people (couple above $250,000) with those mansions. (BTW, I love the "unearned" income jargon --- as if you didn't earn the money in the first place. Sure there are lots of people who have inherited gobs of money, but that was already taxed unless the wealthy benefactor died this year.)

The non-partisan Tax Foundation reports that after the tax break of the first $500,000 gained by the sale of the primary residence, the tax would kick in. (Secondary houses and vacation homes don't receive that exclusion, of course.)

The Foundation notes that the tax will hit more and more people as time goes on: "Furthermore, the $500,000/$250,000 [single earner] primary home sale exclusion amounts are not indexed for inflation, meaning that over the long-run as home prices grow with inflation, more primary home sales would be subject to capital gains taxes."

And people complain that banks aren't lending, and that Americans are acting more frugal. There is a lot of uncertainty being created by this administration. I would read details of ObamaCare to figure out if --- and by how much --- HNW clients will get hit. There is a lot of misinformation out there.

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