Currently an individual who makes a profit of $250,000 or more on the sale of their primary residence ($500,000 or more for married couples) must pay a 15% federal tax on that profit (minus deductions including renovation costs and closing costs). If the capital gains tax cuts expire, the federal tax rate on those proceeds will jump to 20%. Plus starting in 2013, individuals who make at least $200,000 in income ($250,000 for married couples) will have to pay an additional 3.8% health-care tax on capital gains.
The possibilty of the tax increase creates an incentive for homeowners to sell before January 1, 2013. Also, coincindentally the desert’s season kicks off November 1, 2012.
If you are considering selling, please call us for a no obligation market evaluation.
(This information is not intended as tax or legal advice. You should consult with your professional advisors.)