The Truth about the 3.8% Transfer Tax

This from the Texas Association of Realtors:  “A false rumor about a transfer tax on all real estate sales is once again making the rounds on the Internet and in emails. The information being forwarded claims that the Affordable Care Act contains a 3.8% tax on all real estate sales. Not so.  Though the act does include a 3.8% tax on some investment income, it will not come into play for the majority of home sales. First, the tax applies only to people with adjusted gross income of $200,000 ($250,000 for a joint return). Also, homeowners who sell their principal residence will still enjoy the exclusion of $250,000 of gain realized on the sale of the home ($500,000 for married couples).”  Here is a list of scenerios and how the tax would/would not apply: