How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

Will Taxes Rise in 2013 for Million Dollar Plus Home Sellers?

Recently, we saw CNBC Wealth Editor Robert Frank say that anyone who owns an expensive mansion would probably be smart to sell right now because of the impending tax changes for 2013.

Those TV guys always need to create high ratings so sometimes they might say something not exactly 100% accurate. We conferred with one of CPA colleagues (Pat Polo) who works with the owners of a number of high-end properties.

We posted a short Q & A about some of the misinformation about the effect on home sales and the tax changes in 2013.

We asked him if an increasing number of wealthy are looking to sell their homes quickly in case taxes go up next year.

A: I have not experienced a move to sell homes very much as a result of the possible elimination of the Bush era tax rates. I’ve seen more of a move to take advantage of the $5M lifetime exclusion from taxable gifts and the 35% gift tax rate. (The exclusion could revert back to $1M and the rate could revert back to 55% rate if congress does nothing before year end)

What Is Your Capital Gains Tax?

How much might the tax rate go up?

A: This is the capital gains tax consideration. The 15% special rate could simply disappear which could mean a marginal rate as high as 39.6%. Congress has made several changes to capital gains over the years and it is anyone’s guess what they will do with it. I would have to review what the capital gains tax law was before the Bush era but I believe it had special provisions.

What would that mean to someone who owns and sells a $2 million home?

A: This really depends on their tax basis and the $500K gain exclusion is still in place.

So maybe luxury homeowners will not push the panic button in the end of 2012.

Anyone with further tax questions can feel free to contact us and we can direct you to the right resource.

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

How Will 2013 Tax Changes Affect High End Properties?

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1 Comment

Filed under Tax Credits

One response to “How Will 2013 Tax Changes Affect High End Properties?

  1. Pingback: Top 10 Things You Need to Know About the 3.8% Tax | Resource Blog

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