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This was just sent to me from a tax adviser. If its not one way its another way….
Next week the House will vote on its Health Care Reform bill, including a brand new tax provision that will add the 2.9% Medicare tax to investment income, including net rents, royalties, dividends, interest, capital gains and passive income. This tax applies to anyone with income over $250,000. This increases in importance several tax planning strategies that you should already be considering. Like-kind Exchanges – Under Section 1031 of the Internal Revenue Code, exchanges of like-kind property, including real estate, are not subject to income tax. They should also avoid the new Medicare tax on capital gains. Cost Segregation – The new Medicare tax is on NET investment income, meaning income after deductions related to the income. This emphasizes the importance of maximizing your depreciation. If you can eliminate your net rental income through depreciation deductions, then the Medicare tax on your rents also go away. Passive Loss Planning – Many people are not able to use their passive losses. This is simply a result of poor tax and investment planning. With yet another tax on your income, how much more important is it to be able to use all of your losses, including your passive losses? I will let you know how the voting goes next week. It looks like President Obama just may get his health care reform after all. Just make sure you do the tax planning you need so the increases in your tax bill don’t give you a heart attack.
This is just one of many arrogant things this congress and president have done. There will be a fight to stop it and repeal it if it passes.
May I quote this information in an upcoming email blast? who’s the tax advisor so I can give them credit?
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