Equity Tax of 3.8% in the Health Care Bill

[SK in CV]

[quote=Hobie]Guess I fell for the rhetoric during the campaign promising not increase on taxes if you make under $200k. Very short sighted of me to think of this as salary only. Silly me.

[/quote]

I don’t understand this. If you make under $200K it doesn’t apply. Which rhetoric did you fall for?

[Hobie]

[quote=SK in CV]The income level is without regards to wages or other business income. If you earn $400,000 a year from a job, and a have a few bucks in interest income, this tax will not apply.[/quote]

Can you clarify this please. I read the text to intend the gain from a property sale was added to my salary to determine the adjusted gross income and that total is looked at when the tax is imposed. Thank you for helping me understand.

Here is the text:
from page 946:

‘‘SEC. 1411. IMPOSITION OF TAX.
‘‘(a) IN GENERAL.—Except as provided in subsection (e)—
‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual,
there is hereby imposed (in addition to any other tax
imposed by this subtitle) for each taxable year a tax equal to
3.8 percent of the lesser of—
‘‘(A) net investment income for such taxable year, or
‘‘(B) the excess (if any) of—
‘‘(i) the modified adjusted gross income for such
taxable year, over
‘‘(ii) the threshold amount.

[Hobie]

[quote=SK in CV]The income level is without regards to wages or other business income. If you earn $400,000 a year from a job, and a have a few bucks in interest income, this tax will not apply.[/quote]

Can you clarify this please. I read the text to intend the gain from a property sale was added to my salary to determine the adjusted gross income and that total is looked at when the tax is imposed. Thank you for helping me understand.

Here is the text:
from page 946:

‘‘SEC. 1411. IMPOSITION OF TAX.
‘‘(a) IN GENERAL.—Except as provided in subsection (e)—
‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual,
there is hereby imposed (in addition to any other tax
imposed by this subtitle) for each taxable year a tax equal to
3.8 percent of the lesser of—
‘‘(A) net investment income for such taxable year, or
‘‘(B) the excess (if any) of—
‘‘(i) the modified adjusted gross income for such
taxable year, over
‘‘(ii) the threshold amount.

[Hobie]

[quote=SK in CV]The income level is without regards to wages or other business income. If you earn $400,000 a year from a job, and a have a few bucks in interest income, this tax will not apply.[/quote]

Can you clarify this please. I read the text to intend the gain from a property sale was added to my salary to determine the adjusted gross income and that total is looked at when the tax is imposed. Thank you for helping me understand.

Here is the text:
from page 946:

‘‘SEC. 1411. IMPOSITION OF TAX.
‘‘(a) IN GENERAL.—Except as provided in subsection (e)—
‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual,
there is hereby imposed (in addition to any other tax
imposed by this subtitle) for each taxable year a tax equal to
3.8 percent of the lesser of—
‘‘(A) net investment income for such taxable year, or
‘‘(B) the excess (if any) of—
‘‘(i) the modified adjusted gross income for such
taxable year, over
‘‘(ii) the threshold amount.

[Hobie]

[quote=SK in CV]The income level is without regards to wages or other business income. If you earn $400,000 a year from a job, and a have a few bucks in interest income, this tax will not apply.[/quote]

Can you clarify this please. I read the text to intend the gain from a property sale was added to my salary to determine the adjusted gross income and that total is looked at when the tax is imposed. Thank you for helping me understand.

Here is the text:
from page 946:

‘‘SEC. 1411. IMPOSITION OF TAX.
‘‘(a) IN GENERAL.—Except as provided in subsection (e)—
‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual,
there is hereby imposed (in addition to any other tax
imposed by this subtitle) for each taxable year a tax equal to
3.8 percent of the lesser of—
‘‘(A) net investment income for such taxable year, or
‘‘(B) the excess (if any) of—
‘‘(i) the modified adjusted gross income for such
taxable year, over
‘‘(ii) the threshold amount.

[Hobie]

[quote=SK in CV]The income level is without regards to wages or other business income. If you earn $400,000 a year from a job, and a have a few bucks in interest income, this tax will not apply.[/quote]

Can you clarify this please. I read the text to intend the gain from a property sale was added to my salary to determine the adjusted gross income and that total is looked at when the tax is imposed. Thank you for helping me understand.

Here is the text:
from page 946:

‘‘SEC. 1411. IMPOSITION OF TAX.
‘‘(a) IN GENERAL.—Except as provided in subsection (e)—
‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual,
there is hereby imposed (in addition to any other tax
imposed by this subtitle) for each taxable year a tax equal to
3.8 percent of the lesser of—
‘‘(A) net investment income for such taxable year, or
‘‘(B) the excess (if any) of—
‘‘(i) the modified adjusted gross income for such
taxable year, over
‘‘(ii) the threshold amount.

[SK in CV]

Sale of a personal residence is not business income. It is investment income (the $250/500K exclusion notwithstanding). Only investment income is subject to this tax. I didn’t really word my previous comment very well. The way it’s written is actually wrong. The tax would not apply to the $400,000 in salary. It would apply to the interest income.

Example for a married couple filing a joint return. Wages of $275,000. Interest of $5,000. Taxable gain on the sale of a personal residence of $100,000. (Which would mean it was actually a $600,000 gain.) Total income is $380,000. New tax applies on all investment income of $105,000.

Second example. Same facts except total wages are only $100,000. Total income $205,000. Tax does not apply because it’s under the $250,000 threshold.

Third example. Same facts except total wages are $200,000. Total income of $305,000. Tax applies on the lesser of investment income of $105,000 or total income less the threshold amount. ($305,000 less $250,000 or $55,000) Tax would only apply on the $55,000.

[SK in CV]

Sale of a personal residence is not business income. It is investment income (the $250/500K exclusion notwithstanding). Only investment income is subject to this tax. I didn’t really word my previous comment very well. The way it’s written is actually wrong. The tax would not apply to the $400,000 in salary. It would apply to the interest income.

Example for a married couple filing a joint return. Wages of $275,000. Interest of $5,000. Taxable gain on the sale of a personal residence of $100,000. (Which would mean it was actually a $600,000 gain.) Total income is $380,000. New tax applies on all investment income of $105,000.

Second example. Same facts except total wages are only $100,000. Total income $205,000. Tax does not apply because it’s under the $250,000 threshold.

Third example. Same facts except total wages are $200,000. Total income of $305,000. Tax applies on the lesser of investment income of $105,000 or total income less the threshold amount. ($305,000 less $250,000 or $55,000) Tax would only apply on the $55,000.

[SK in CV]

Sale of a personal residence is not business income. It is investment income (the $250/500K exclusion notwithstanding). Only investment income is subject to this tax. I didn’t really word my previous comment very well. The way it’s written is actually wrong. The tax would not apply to the $400,000 in salary. It would apply to the interest income.

Example for a married couple filing a joint return. Wages of $275,000. Interest of $5,000. Taxable gain on the sale of a personal residence of $100,000. (Which would mean it was actually a $600,000 gain.) Total income is $380,000. New tax applies on all investment income of $105,000.

Second example. Same facts except total wages are only $100,000. Total income $205,000. Tax does not apply because it’s under the $250,000 threshold.

Third example. Same facts except total wages are $200,000. Total income of $305,000. Tax applies on the lesser of investment income of $105,000 or total income less the threshold amount. ($305,000 less $250,000 or $55,000) Tax would only apply on the $55,000.

[SK in CV]

Sale of a personal residence is not business income. It is investment income (the $250/500K exclusion notwithstanding). Only investment income is subject to this tax. I didn’t really word my previous comment very well. The way it’s written is actually wrong. The tax would not apply to the $400,000 in salary. It would apply to the interest income.

Example for a married couple filing a joint return. Wages of $275,000. Interest of $5,000. Taxable gain on the sale of a personal residence of $100,000. (Which would mean it was actually a $600,000 gain.) Total income is $380,000. New tax applies on all investment income of $105,000.

Second example. Same facts except total wages are only $100,000. Total income $205,000. Tax does not apply because it’s under the $250,000 threshold.

Third example. Same facts except total wages are $200,000. Total income of $305,000. Tax applies on the lesser of investment income of $105,000 or total income less the threshold amount. ($305,000 less $250,000 or $55,000) Tax would only apply on the $55,000.

[SK in CV]

Sale of a personal residence is not business income. It is investment income (the $250/500K exclusion notwithstanding). Only investment income is subject to this tax. I didn’t really word my previous comment very well. The way it’s written is actually wrong. The tax would not apply to the $400,000 in salary. It would apply to the interest income.

Example for a married couple filing a joint return. Wages of $275,000. Interest of $5,000. Taxable gain on the sale of a personal residence of $100,000. (Which would mean it was actually a $600,000 gain.) Total income is $380,000. New tax applies on all investment income of $105,000.

Second example. Same facts except total wages are only $100,000. Total income $205,000. Tax does not apply because it’s under the $250,000 threshold.

Third example. Same facts except total wages are $200,000. Total income of $305,000. Tax applies on the lesser of investment income of $105,000 or total income less the threshold amount. ($305,000 less $250,000 or $55,000) Tax would only apply on the $55,000.

[Zeitgeist]

Welcome to the revolution.

[Zeitgeist]

Welcome to the revolution.

[Zeitgeist]

Welcome to the revolution.

[Zeitgeist]

Welcome to the revolution.

[Author]

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