Updates from September, 2012

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• 3.8% Tax on Housing? Answers & Resources

  MSC Marketing 9:57 am on September 27, 2012 | Comments:1
  Tags: consumer news (11), federal tax, health care   Filed under: Consumer news and advice, Federal Goverment, Tax

  by The KCM Crew on September 25, 2012

  Here are the 10 Things You Need to Know About the 3.8% Tax according to the National Association of Realtors (NAR):

  1.) When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will NOT be subject to this tax.

  2.) The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchase a home or other investment property.

  3.) You’ll NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

  4.) If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

  (More …)

  
   
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• Is There a 3.8% House Seller Tax in the Health Care Bill?

  MSC Marketing 9:57 am on July 19, 2012 | Comments:0
  Tags: federal (9), selling (2), Tax (7)   Filed under: Federal Goverment, Income Tax, Tax

  by The KCM Crew on July 17, 2012

  The political rhetoric surrounding the presidential election has renewed the debate about the Administration’s Health Care Bill. We are again getting many questions about a possible 3.8% tax on home sales that some claim is in the bill. To answer these questions, we have decided to re-run a blog we posted earlier this year. – The KCM Crew

  We have received many questions about a possible 3.8% tax which will be put on home sales beginning in 2013. We want to do our best to clarify this situation for everyone. We are not accountants and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

  A little history on the confusion

  Fact Check.org explains it this way:

  The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

  (More …)

  
   
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• Mortgage Forgiveness Debt Relief Act: Will It Be Extended?

  MSC Marketing 9:23 am on May 17, 2012 | Comments:0
  Tags: consumer info (2), debt relief, federal (9), mortgage (67), Tax (7)   Filed under: Consumer news and advice, Federal Goverment, FHA, Finance, Foreclosure, Home owner information, Income Tax, mortgage, Tax, Tax credit

  by The KCM Crew on May 16, 2012

  Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

  The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

  (More …)

  
   
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• You May Owe Federal Income Taxes in 2013 if you have a Short Sale, Foreclosure

  MSC Marketing 12:13 pm on January 12, 2012 | Comments:0
    Filed under: Foreclosure, Short sales, Tax

  In Tuesday’s Sarasota Sales Meeting & Caravan, Branch Manager Darla Furst mentioned the following article about Short Sales and Foreclosure Tax Implications for 2012 and beyond. It’s a very good article to read and study.  With any financial transaction like this, there are pros and cons – and it’s important to consult all of the right experts such as a tax accountant and/or attorney.  Rushing into a decision to short sell or foreclose shouldn’t be done based on articles like these, but instead on sound advice from the right experts.
  

  WASHINGTON – Jan. 9, 2012 – You may owe federal income taxes in 2013 if you have a short sale, foreclosure after this year. Now is the time to make the hard decision: Are you going to walk away from your underwater home?

  Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.

  But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.

  So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.

  Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31. (More …)

  
   
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• For the More Affluent Home Seller

  MSC Marketing 10:58 am on August 18, 2011 | Comments:0
  Tags: income tax (2), Seller information (50), Tax (7), Tax Credit (9)   Filed under: Consumer news and advice, Income Tax, Seller Info, Tax

  by Dean Hartman on August 18, 2011

  Estate Planning is a boring topic. However, there are few issues more misunderstood that have such tremendous impact on families and the legacy they leave behind. Many people don’t realize that when adding a home to their assets, being a “paper” millionaire isn’t as farfetched as it seems when living paycheck-to-paycheck.

  The federal estate tax exemption has been extended for two years (2011 & 2012). The extension also increased the amount to $5 million ($10 million for couples) and the tax rate has been lowered to 35%. This means that you can leave $5 million to your heirs free of federal estate tax and that most married couples can leave up to $10 million free of federal estate tax.

  For gift tax, the new law changed from the $1 million Lifetime Gift Tax Exclusion in 2010 to a $5 million Unified Gift Tax Credit. The new law creates an important planning opportunity. This means, as of 2011, individuals will be able to make gifts of $5 million ($10 million for a married couple).

  The value of your estate includes all of your assets (ex: cash, investments, your personal residence, other real estate, etc.) generally determined at the fair market value on the date of death. Since the law may revert back to $1 million, serious tax planning is necessary if your assets exceed the $1 million.

  As stated earlier, the provisions are temporary. They are assured for this year and next. If the law is not extended or amended, it will sunset and the Federal estate tax exemption will revert back to $1 million with a maximum tax rate of 55%!

  It is important that you consult an accountant and/or a financial planner to make sure you are minimizing Uncle Sam’s bite from your estate, so that you leave the maximum number of dollars to your loved ones. If you need a referral to a solid advisor, reach out to your loan officer…they should have one on their team.

  http://kcmblog.com/2011/08/18/for-the-more-affluent-home-seller/#more-8800

  
   
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• Was Bailout Not as Costly as Previously Estimated?

  MSC Marketing 8:58 am on March 3, 2011 | Comments:0
  Tags: economy (79), federal (9), goverment, Tax (7)   Filed under: Consumer news and advice, economy, Federal Goverment, Tax, The Economy

  By Jim Puzzanghera

  RISMEDIA, March 3, 2011—(MCT)—Almost three years after a series of government bailouts began, what many feared would be a deep black hole for taxpayer money isn’t looking nearly so dark. The brighter picture is highlighted by the outlook for the bailouts’ centerpiece—the $700 billion Troubled Asset Relief Program. “It’s turning out to cost a lot less than what we all thought at the beginning,” said Ted Kaufman, a former U.S. senator from Delaware who heads the congressionally appointed panel overseeing TARP.

  In mid-2009, the program was projected to lose as much as $341 billion. That’s been reduced to $25 billion—partly because of the controversial decision to pump much of the TARP money into banks instead of launching a large-scale purchase of securities backed by toxic subprime mortgages.

  There is now broad agreement that the bailouts worked, stabilizing the financial system and preventing an even deeper crisis. (More …)

  
   
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• Grieving Can Be Good!

  MSC Marketing 8:29 am on February 10, 2011 | Comments:0
  Tags: seller info (69), Seller information (50), Tax (7)   Filed under: Seller Info, Tax

  by Dean Hartman on February 10, 2011

  In many municipalities, it is that time of year when homeowners have an opportunity to grieve their taxes. In most places, your real estate tax bill is determined largely by the value of your home. With the tumble in home values continuing, many homes have an over-assessed value attached to them. So, if you own a home, I suggest you explore the complete process: the forms required, the data you need, and the deadlines you need to hit. Real estate taxes are calculated by a simple formula:

  Assessed Value x The Tax Rate = Your Taxes

  The lower the assessed value is, the lower taxes. Understand that many municipalities cannot afford the loss in revenue, so they increase The Tax Rate to compensate. That means if you DON’T grieve your real estate taxes, your taxes can actually increase….even though your home has decreased in value! (More …)

  
   
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• Does Health Care Bill Contain 3.8% Home Sales Tax?

  MSC Marketing 9:09 am on January 27, 2011 | Comments:0
  Tags: Buyer info (77), Consumer news and advice (164), Federal Goverment (4), seller info (69), Tax (7)   Filed under: Buyer Info, Consumer news and advice, Federal Goverment, Seller Info, Tax

  by The KCM Crew on January 26, 2011

  As the states and the new Congress renew the debate about the Administration’s Health Care Bill, we are again getting many questions about a possible 3.8% tax on home sales that some claim is in the bill. To answer these questions, we have decided to re-run a blog post we did last year. – The KCM Crew

  We have received many questions about a possible 3.8% tax which will be put on home sales beginning in 2013. We want to do our best to clarify this situation for everyone. We are not accountants and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

  A little history on the confusion

  Fact Check.org explains it this way:

  The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home. (More …)