New real estate tax already kicked in, regardless of fiscal cliff debate

TRD New York /
Jan.January 03, 2013 09:30 AM

While some uber-wealthy Americans were shaking in their boots awaiting a deal in Washington to avoid the “fiscal cliff,” those who dabble in real estate many have already been pulling out a fountain pen and the company checkbook. According to the Wall Street Journal, those who receive rental income from properties such as apartment buildings, single-family homes and retail shops were hit with an investment surtax of 3.8 percent on January 1.

The so-called Medicare tax, passed as part of the Affordable Healthcare Act in 2010, won’t affect real-estate companies or those who work full-time managing their real-estate portfolio.

The Medicare tax will affect high-earning professionals, such as doctors and lawyers, who invest in real estate on the side, but not real-estate companies or those who manage a real-estate portfolio full time.  However, the tax also covers all types of investment income, like dividends, capital gains and interest from banks and bonds, according to the Journal.

“We know for certain the Medicare tax is here to stay,” said Jim Guarino, a partner at MFA-Moody, Famiglietti & Andronico, LLP, an accounting firm in Tewksbury, Mass. “I think there might have been some question if the tax would be a bargaining chip in the fiscal cliff negotiations. It was not.” [WSJ]Christopher Cameron


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Finger and Finger principal Kenneth Finger and landlord activist Jeff Hanley with Westchester (Credit: iStock)

Westchester group lobs its own constitutional challenge to New York’s rent law

Kings Plaza Shopping Center and JPMorgan's Jamie Dimon 

Macerich lands nearly $500M refi for Kings Plaza Shopping Center

WeWork's Artie Minson and Managed by Q's Dan Teran 

WeWork in talks to sell off Managed by Q to free up some cash

(Credit: iStock)

What you need to know about investing in healthcare real estate

Square Mile Capital's Craig Solomon and Hope Street Capital's Sha Dinour with renderings of 550 Clinton Avenue in Brooklyn (Credit: Getty Images and Morris Adjmi Architects)

Square Mile Capital provides $180M loan for Brooklyn tower

arrow_forward_ios