New 3.8% Medicare Tax!

NEW 3.8% MEDICARE TAX (#163) "ASSESSING THE IMPACT OF REAL ESTATE INVESTORS"

UNDERSTANDING THE NEW 3.8% TAX OF INVESTMENT INCOME With potential tax increases looming on the horizon, the value of tax deferral mechanisms, such as Section 1031 exchanges, have never been greater. One example of a potential tax increase which appears likely to take effect is the new Medicare tax, which Congress passed as part of the Health Care and Education Affordability Reconciliation Act of 2010, and was recently upheld by the Supreme Court. The Medicare tax, which goes into effect on January 1, 2013, will impose a 3.8% tax on the net investment income of joint filers with adjusted gross income over $250,000, and single filers with adjusted gross income over $200,000. The new Medicare tax applies to adjusted gross income (the figure on the bottom of the front page of IRS Form 1040), which includes interest, dividends, capital gains, wages, retirement income and income from partnerships and small businesses. It appears the tax will also apply to dividends, rents, royalties, interest (except municipal bond interest), short and long-term capital gains, the taxable portion of annuity payments, income from the sale of a principal residence above the $250,000/$500,000 exclusion, gain from the sale of an investment property or a second home, and passive income from real estate and investments in which the taxpayer does not materially participate. The National Association of Realtors (NAR) has prepared a brochure that contains a summary of the impact of this new Medicare tax on real estate investors and includes examples of several different investor scenarios. Clickhere to access the NAR Booklet, The 3.8% Tax: Real Estate Scenarios & Examples. OTHER POTENTIAL TAX INCREASES IN 2013 In addition to the new Medicare tax discussed above, the "Bush-era Tax Cuts," which went into effect in 2001, are scheduled to expire at the end of this year. If the Bush-era Tax Cuts are allowed to expire due to inaction by Congress, the Federal capital gain tax rate will increase to 20%, and the highest marginal tax rate for ordinary income will increase from 35% to 39.6%. THE COMBINED EFFECT OF THE TAX INCREASES ON REAL ESTATE INVESTORS Future tax rates remain uncertain. But taking into account the imposition of the new 3.8% Medicare tax, and the uncertainty regarding the Bush-era Tax Cuts, on January 1, 2013 taxpayers could face one of three scenarios: If Congress extends the Bush-era Tax Cuts, the top Federal tax rate on long-term capital gains will increase from 15% to 18.8%. If Congress lets the Bush-era Tax Cuts expire, the top Federal tax rate on long-term capital gains will increase from 15% to 23.8%, and the top tax rate on dividends will nearly triple to 43.4%. If Congress extends the Bush-era Tax Cuts, but not for all tax brackets, this will result in a combination of the above two scenarios, and the top Federal tax rate on long-term capital gains will likely rise for higher earners, but not for all tax brackets. THE TAX CODE TAKETH, THE TAX CODE DEFERRETH- THE INCREASING VALUE OF 1031 EXCHANGES Despite these potential tax increases, one aspect of the tax code provides real estate investors with a huge tax advantage. A Section 1031 exchange, part of the tax code since 1921, allows real estate property owners holding property for investment purposes to defer taxes that would otherwise be incurred upon the sale of investment property. Savvy investors use 1031 exchanges to redeploy their investment capital into better performing investment properties. An exchange provides a fantastic opportunity for investment property owners to defer capital gain taxes. Call the 1031 exchange experts on Pete Dijkstra's Team today at 480-812-9200 and visit www.anyazhome.com.

New program in Arizona to help save under water home owner - Short Sale Assistance in Chandler, Gilbert, Tempe, Scottsdale, Mesa, Queen Creek, Sant Tan Valley Arizona

There is a new program being administered by the Arizona Department of Housing to help Arizona under water home owners save their homes. There are qualifying terms but it could help under water homes owners with a principal reduction of up to $50,000 off of the balance of their loans.

The Arizona Home Foreclosure Prevention Funding Corporation will offer assistance to customers facing foreclosure in Arizona's Hardest Hit Markets. AHPFC provides assistance in the form of Mortgage Modification, Principal Forbearance, Mortgage Payment Relief and Second Lien Elimination.


Qualifications
Eligibility for the Saving Our Home AZ assistance is based on a variety of factors.

•The household may not have gross income (the total income before taxes, health care costs, social security, etc.) of more than 120 percent of the area median income for the County in which the property is located. The below table reflects 120 percent of the area median income by Household Size and County. For more information on this program contact Pete Dijkstra for a no obligation consultation on saving your home 480-221-1332 or 800-318-8330

Short Selling your home is not the only option if you are an Arizona Home Owner facing foreclosure. the Pete Dijkstra Team are Certified Default Advocates helping save Arizona home owners. We have Loan Officers who can help review your situations and see if refinancing thru the HARP program is an option. We also have Attorneys who will give you a consultation to make sure that the choice you make is the right one. Don't let your home go to FORECLOSURE we are here to help and have had years of experience.

Chandler, Gilbert, Mesa, Tempe, Scottsdale, Queen Creek & San Tan Valley home owner's. Have you been wanting to move but have been upside down for so long you did not think it was an option? Values have risen almost 30% in some areas of the Phoenix Valley. Don't rely on a website like zillow to tell you what your home is worth. Call for a FREE in depth comprehensive valuation of your for a FREE consultation 480-221-1332
www.AnyAZShortSale.com


Meet The Pete Dijkstra Team by clicking here! We are a Team of full time Real Estate Agents serving the greater text-align: center;">

Call The Pete Dijksta Team Today 480-221-1332

Chandler Arizona

Gilbert Arizona

Mesa Arizona

Queen Creek Arizona

San Tan Valley Arizona

Scottsdale Arizona

Tempe Arizona

Phoenix Metropolitan Short Sale & Housing Assistance

home and find out today what it is worth. Call Pete Dijkstra at 480-221-1332 or 800-318-8330.
www.AnyAZHome.com


Scottsdale, Chandler, Gilbert, Tempe, Mesa, Queen Creek & San Tan Valley home owner's. If you are facing foreclosure or struggling with your payments there are options. We have a Team of Licensed Realtors, Lenders and Attorneys who can help you find out what your options are and make the best choice available to you. Call Pete Dijkstra Today

Phoenix Metropolitan area including Queen Creek, San Tan Valley, Gilbert, Chandler, Mesa, Tempe, Scottsdale, Queen Creek and more. We know that we have The "Experience That Will Move You!"

CERTIFIED DEFAULT ADVOCATE

"Our Firm is Dedicated to the Prevention of Foreclosures, One Homeowner at a time"