Posted on 05/04/2010 9:31:35 PM PDT by smokingfrog
There is some confusion out there as to what the new health care bill’s impact will be on real estate.
A number of articles we have seen have somewhat correct. but misleading information.
Hopefully, we can set the record straight.
Starting Jan. 1, 2013 a new tax will be initiated called the Medicare Tax to help pay for the health care bill.
This tax will affect passive income such as rental income and the sale of your home may also be taxed if the profit on the sale exceeds a threshold.
The new tax in not indexed for inflation, so quite possibly, as time passes, more of us may be affected.
The tax on passive rental income will be 3.8 percent on any total adjusted net income (including earned income) over $200,000/$250,000 (single/married) a year.
For most of us, this will not have a direct effect, however, if you have an investment in a Real Estate Investment Trust (REIT), it has potential to cause your investment income to decrease ... or will it?
For example, a REIT may own a large portfolio of apartment buildings where the income would certainly be over the annual tax threshold of $250,000.
REIT’s will want to maintain their income levels for their investors, and as with most corporate taxes, they will most likely be passed on to the person who can least afford the increase; the renters who are the guys and gals who make way less than $250,000 per year.
So while the government can brag that no one making less than $250,000 a year will have any new taxes directly levied on them, they almost certainly will feel the effect of the tax through increased rental payments.
Sort of reminds you of the sleight of hand game called Three Card Monte.
(Excerpt) Read more at paysonroundup.com ...
Repeal 0bamacare!
No...nuke it from orbit....repeal isnt strong enough!
I put a little publication out for my Precinct...in it I had this....
Details about the “Health Care” bill that you may not know…and that may change.
1. 3.8% tax on investment income, including IRAs, 401(k)s, and Annuities for those w/income over $200,000/250,000….NOT indexed for inflation so it will affect more later. And it COULD include rental income...and of course, the income threshold COULD change…..remember Social Security?
2. IRS agents will verify if you have “acceptable” health care coverage, and take your “refund” if you do not.
IRS has the authority to fine you up to $2250 or 2% of your income (whatever is greater) for failure to prove you have purchased min. insur.
3. IRS will need up to $10 billion to administer the new program this decade and this bill creates about 159 new bureaucracies.
4. It destroyed ALL PRIVATE Student Loans... except 1 bank in N. Dakota
5. President, Congress members, Sr Staff are ALL EXEMPT from health Care bill, or are they? Developing story here…..
6. Requires employers w/over 50 employees to provide a private space & unpaid time off during workday for mothers to express milk
7. Restaurants, etc, w/over 20 locations will be required to show calorie counts, etc. on menu boards, drive-thrus, menus, etc.
8. SEIU and other Union members are EXEMPT from Cadillac tax on insurance
9. Tanning Salons are taxed at 10%
Anyone working over 120 hours p/Qtr is considered a FULL TIME employee
10. 3.8% TAX on the Sale of Real Estate (and maybe on rental income too)
11. You begin paying for “benefits” in 2010, but few benefits start until 2014.
12. Tax Credit for small businesses is TEMPORARY. And, if total payroll is above $25,000/yr, the small business credit percentage drops.
13. Medicare Advantage participants will be cut.
14. $20 billion excise tax over 10 years on manufacturers of power wheelchairs, sleep apnea, respiratory and other equipment.
15. 40% tax on “high quality” insurance plans.
16. $140-250 tax deduction from paycheck MONTHLY for long term health care (Voluntary?).
Amish, Muslims & other select groups are exempt from Health Care Bill.
17. Limit to $2500 on FSA Contributions. No OTC drugs reimb. In H S Accts.
18. In 2014 No pre-existing conditions to prohibit coverage, and no lifetime limits, (which means why bother getting coverage until you get sick???)
19. Extends healthcare coverage for dependents to age 26, unless they are eligible for healthcare benefits elsewhere.
20. Illegals do not have to pay any penalties and Illegal immigrants will not be allowed (required?) to buy health insurance in the exchanges
21. $500 Billion in Medicare cuts over the next decade
22. Bans importation of Canadian (and other) drugs (Drug costs go up).
Well, Barack the Kenyan said we wouldn’t be taxed a dime. That’s true. He’s going after the big bucks. I would have preferred the dime.
They are completely lying about not raising taxes on those below the 200/250K phony cut-off. The medical exclusion goes from 7.5% of income to 10% of income. That affects everyone who does a Schedule A.
Also flexible spending accounts will be limited to $2500, effectively raising taxes on people who formerly could put in far more.
Why do they want to restrict people’s flexible spending accounts like that? If you can save money to pay for your own medical expenses, you can have a cheaper policy with higher deductables.
I guess the goobermint just doesn’t want to encourage people to be too responsible for their own well being.
So they can pick your pocket. It's the RAT way.
Before we retired, we put away 5K every year without fail for the health FSA. If we were still working, this sleight-of-hand in the new law alone would cost us the better part of a thousand bucks a year. This is because with the new 10% exclusion for deductible medical expenses there is little chance we'd be able to deduct any of the items we used the FSA for on our schedule A.
Of course the LSM has nothing to say about this broken promise. Can you imagine if Dubya had done it?
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