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New Medicare Tax 2013 – How It Will Impose on Real Estate Sales

New Medicare Tax 2013 – How It Will Impose on Real Estate Sales:  Many of you have heard about the new Medicare Tax as part of the New Obama Health Care Law, officially called the “Patient Protection and Affordable Care Act” signed by President Obama on March 23, 2010.  And many have questions as to how it will effect investment income from rental property, as well as income from the sale of real estate investments, commercial and residential.  Who will it effect and when?

The Wisconsin REALTORS(R) Association (WRA) just recently published and distributed an article to it’s members with just these questions and facts.  Here are the facts:

Beginning in 2013, a new 3.8% Federal tax will be imposed on investment income of “high-income earners” — single households with adjusted gross incomes (AGI) over $200,000.00 and married households above $250,000.  The tax applies to smaller of the household’s net investment income or the excess of AGI over the thresholds.  Capital gains are treated as investment income.

If a household’s AGI exceeds the thresholds, the household will be required to pay 3.8% tax on the folloing types of real estate:

  • The gain from the sale of a primary residence, if the gain on the home exceeds $250,000.00 for single housholds or $500,000.00 for married households (Note: For theprimary residences, the tax apllies only to the gain over these amounts.
  • The gain from the sale of second homes.
  • The gain from the sale of investment and commercial real estate
  • Net rental income from investment properties.

Source: Wisconsin REALTORS(r) Association

For more information on the new Medicare Tax “click here” or to request a copy of the article, please e-mail me at with the subject Medicare Tax 2013.


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