Trying to avoid possible tax changes? You may need to sell now.
With the election looming and the current economic realities, most experts seem to agree that many tax rates will be increasing in 2013. The new “Medicare” excise tax on high income earners is already set to take effect on January 1, 2013. In brief, this is an additional tax of 3.8% for individuals with an AGI (Adjusted Gross Income) over $200,000 or couples filing jointly with an AGI in excess of $250,000. This tax is applied to the income in excess of these income limits… but investment and passive income is also counted in that! So, the sale of your home (in excess of the exemptions) might be added to that. The National Association of Realtors® has some scenarios that might help in understanding this tax (click on the link below): NAR 3.8% Tax Scenerios Additionally, many think that 2013 will bring even more changes to the higher tax brackets and capital gains rates. We are recommending our clients review their real estate holdings with us and their estate planning consultants now. If liquidating any of these assets makes sense for your estate plan, the time to list these properties to close by the end of 2012 is NOW!* * DISCLAIMER: Benn Pacific Group Inc. and its agents and affiliates are NOT experts on tax and estate planning matters. You should consult your CPA and/or tax/estate planning attorney for advice prior to making an investment decision.
