The 3.8 percent healthcare tax, which took effect on Jan. 1, has wide-reaching implications for investment real estate.
The impacts of this law were examined in a recent CCIM Institute member webinar hosted by Jeff Bilsky, senior director of BDO USA’s national tax office.
The 3.8 percent tax is imposed on the lesser of net investment income or modified adjusted gross income over $250,000 (married filing jointly), $125,000 (married filing separately), or $200,000 (individual filing). The tax also applies to the lesser of a trust or estate’s undistributed net investment income or the excess of adjusted gross income over $7,500.
Bilsky examined the categories of investment income that are tax eligible as well as exclusions, including rental income and gains on sale of rental property when income is generated by a real estate professional who materially participates in the rental activity or the rental activity constitutes a trade or business.
View CCIM’s Section 1411 Net Investment Income Tax webinar to learn more about the effects of the 3.8 percent tax on net investment income, how to calculate the potential changes in rental income, and more.
Source: CCIM Institute