The Anna Maria Island Sun Newspaper

Vol. 12 No. 41 - July 25, 2012

REAL ESTATE

Obamacare affects real estate transactions

 

On June 28, the Supreme Court upheld the Patient Protection and Affordable Care Act informally referred to as Obamacare as constitutional under the federal government’s taxing powers. At this point, the law is essentially a done deal that will have far reaching effects on all Americans way beyond the scope of health care, including taxes that will have an effect on real estate transactions.

Beginning Jan. 1, 2013, a tax of 3.8 percent will be assessed on some investment income like interest, dividends, rental income and capital gains, which may include some real estate transactions. The purpose of the tax is to raise $210 billion to help fund the health care and Medicare over-haul representing about half of the total new expenditures.

About a month ago, I talked about the misrepresentation of this tax before we knew that it was going to be implemented. At that time I reminded everyone that this was not a 3.8 percent tax on every real estate transaction, which was the rumor circulating at the time, but rather a limited tax based on income and a variety of variables.

Now that we know the tax is almost certain to commence next year, everyone who owns real estate or is considering purchasing either personal use or investment real estate should be aware of the specifics. In an effort to educate their members and the public, the National Association of Realtors has published a brochure which is available on line explaining the law. Like any new tax law, it is important for you to consult with a tax professional before making any decisions, however, there are some basics to be aware of.

The first criteria that must be met in ordered to be required to pay this tax is an Adjusted Gross Income (AGI) of $250,000 or more for married couples or $200,000 for singles. For example, if a married couple with an AGI of $300,000 has a capital gain on the sale of their primary residence of $600,000 they would be required to pay 3.8 percent on $100,000 or $3,800. The first $500,000 of capital gains for a married couple selling their primary residence is exempt, and for single individuals the first $250,000 is exempt.

Second homes that are not used as rental properties do not have the benefit of a capital gains exemption. Therefore, the profit on the sale is added to your adjusted gross income, and tax would be due on the excess over the $250,000 income level for couples.

Commercial and investment property is a whole other calculation which involves depreciation recapture and needs to be determined by a professional. However, since most commercial and many investment properties are in the upper value ranges, adding a 3.8 percent capital gains tax on the profits could be substantial.

Whether you’re like approximately half of the country that agrees with the new mandate or half that does not is a moot point as it will affect many real estate sales, whether you like it or not. If you fall within the parameters outlined in the law, you will be subject to the additional unearned income tax or tax on the money you earn on your capital. Unfortunately, as we all know, taxes can be a slippery slope. Restrictions that are applicable in 2013 could easily be relaxed in future years encompassing more and more real estate transactions.

Real Estate Transactions
Real Estate Transfers from June 1 to June 30, 2012
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

06/01/2012 749,000 730,000 126 Hammock Road 3000 75x118 3Br/3Ba SFR
06/13/2012 599,900 570,000 608 Fern St. 1676 50x114 3Br/2Ba SFR
06/15/2012 650,000 575,000 9802 Gulf Drive 736 110X100 1Br/1Ba SFR
06/18/2012 849,000 775,000 310 Palm Ave. 1500 72X110 3Br/3Ba SFR
06/18/2012 540,000 530,000 403 S. Bay Blvd. 1651 73X105 3Br/3Ba SFR
06/21/2012 339,900 340,500 211 Spring Ave. 1568 52x145 3Br/1.5Ba SFR
06/22/2012 420,000 390,000 709 N. Bay Blvd. 873 50x100 2Br/2Ba SFR
06/29/2012 428,000 420,000 209 Archer Way 1562 80x141 3Br/2Ba SFR
06/04/2012 439,000 350,000 753 Jacaranda Road 7501 Units Vac.
06/26/2012 450,000 440,000 210 Coconut Ave. 52x100 Vac.

Bradenton Beach

06/01/2012 194,900 155,000 108 N. Fourth St. 786 2Br/1Ba SFR
06/11/2012 575,000 520,000 2312 Canasta Drive 1000 50x193 1Br/1Ba SFR
06/28/2012 574,000 545,000 2501 Avenue B 1728 50x100 3Br/2Ba SFR
06/13/2012 375,000 350,000 1325 Gulf Drive #160 1392 2Br/2Ba Condo
06/19/2012 675,000 632,000 2600 Gulf Drive N. #27 1179 2Br/2Ba Condo
06/21/2012 375,000 375,000 1800 Gulf Drive N. #103 960 2Br/2Ba Condo
06/22/2012 175,000 168,000 2601 Gulf Drive N. #325 960 2Br/2Ba Mobile
06/15/2012 449,900 409,000 2306 Avenue B 1768 50x100 5Br/3.5Ba Inc.
06/06/2012 299,000 299,000 1421 Gulf Drive N. #11 1524 3Be/2.5Ba TH Short Sale

Holmes Beach

06/04/2012 259,800 255,000 2701 Gulf Drive 968 50x100 2Br/2Ba SFR
06/08/2012 594,000 525,000 311 68th St. 1500 3Br/2Ba SFR
06/14/2012 359,000 350,000 216 84th St. 1268 90x100 2Br/2Ba SFR
06/15/2012 545,000 500,000 117 Neptune Lane #A 1980 58x114 4Br/4Ba SFR
06/22/2012 524,900 470,000 312 61st St. #A 2212 3Br/2.5Ba SFR
06/22/2012 474,500 445,000 5608 Holmes Blvd. 1260 3Br/2Ba SFR
06/27/2012 999,000 925,000 623 Ivanhoe Lane 3000 112x105 3Br/4Ba SFR
06/28/2012 359,900 330,000 4601 Gulf Drive 1190 2Br/2Ba SFR Short Sale
06/29/2012 369,000 330,000 5806 Imperiore Ave. 1150 50x101 2Br/2Ba SFR
06/29/2012 349,900 332,000 404 72nd St. 1517 100x85 3Br/2Ba SFR
06/01/2012 275,000 251,250 6400 Flotilla Drive #23 1426 2Br/2Ba Condo
06/11/2012 799,000 780,000 3109 Avenue F #B 3464 3Br/3Ba Condo
06/15/2012 209,900 200,000 6500 Flotilla Drive #152 1066 2Br/2Ba Condo
06/29/2012 399,000 395,000 321 64th St. #8a 2001 3Br/2.5Ba Condo
06/25/2012 299,900 265,000 408 Clark Lane 1929 3Br/3Ba 1/2 Duplex
06/04/2012 399,000 337,500 206 81st St. #A&B 2050 47x90 3Br/1.5Ba Inc.

Cortez

06/15/2012 69,000 40,000 12308 Egret Harbour Way 74x152x92x204 Vac.
06/12/2012 469,000 440,000 3840 Mariners Way 525 2156 3Br/2Ba Condo

Source: Manatee County Property Appraiser’s Office


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