(775) 786-6141
New Federal Sales Tax on Real Estate – Simply Not True

If you recently got an e-mail telling you that on January 1st all real estate transactions will be subject to a 3.8% federal sales tax, don’t believe it. That is simply not true.

The facts are as follows:

• First of all, the new tax is applicable only to the gain on sale, not the entire sales price.

• The tax applies only to single taxpayers with modified adjusted gross income in excess of $200,000 and married taxpayers with modified adjusted gross income over $250,000 if filing a joint return, or $125,000 if filing separately.

• The tax is actually only equal to 3.8% of the lesser of the taxpayers’ “net investment income” or the amount by which their modified adjusted income exceeds the threshold amount.

• Only taxpayers with modified adjusted gross income over $200,000 (or $250,000 if married filing jointly) who sell their principal residence AND realize more than $250,000 in GAIN ($500,000 if married filing jointly) will be subject to the 3.8% tax and only on the amount of gain they realize OVER the $250,000/$500,000 threshold (and on their other net investment income).


Barnard Vogler & Co.
100 W. Liberty St., Suite 1100
Reno, NV 89501

T: (775) 786-6141
F: (775) 323-6211


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