Wednesday, July 18, 2012

Is the 3.8% Tax on All Real Estate Sales Correct?

The short answer is no. While you may have seen the emails or editorial pieces that are floating around the internet which state the contrary, there are some key facts missing. While this tax will apply to some home sales starting January 1, 2013 it is only for a small group of people. Those with an AGI of $200,000 individually or $250,000 if filling jointly qualify for the additional 3.8% tax. The tax will only apply to the amount above the $200,000/$250,000 income limits. And with that, the tax won't apply to the first $250,000 of profits from the sale of a primary residence or $500,000 if a married couple.

With the convoluted nature of tax code it is easy to see how this rumor got started, especially in our market. In the Vail Valley we probably will have a higher rate of people this tax effects because of the higher incomes and non-primary residence homeowners.  Another thing to remember is that this is not a tax solely on real estate transactions, it covers all investment income.

Here is an example...If AGI for an individual is $275,000, the excess over the threshold of $200,000 is $75,000. This person also has a net investment income of $60,000. The new tax only applies to the lesser of the two amounts, so they will pay the 3.8% tax on the $60,000.

You will need to be aware of your personal situation and possibly talk with your accountant about what tax ramifications you may encounter when selling your home if you anticipate a profit. As always, feel free to contact me with any questions you may have or to refer you to a few real estate lawyers or accounts that can help you out.

Friday, July 13, 2012

Colorado Wildfire Help

With the recent fires in our state many people are wondering how they can help the victims. Here is a list of ways you can do your part to help out our Colorado neighbors.

Donate Money

The best way to help out in these situations is to donate money to the correct organizations and let them handle how to use it best. Through the website you can make donations to the organization of you choice from the Red Cross to local humane societies.

Donate Things

Another way to help is to donate unused things to a local charity. The victims will need everything from clothes and blankets to cooking supplies and toothpaste. Most of the local charities are working with the organizations helping the fire victims so this is a 
great way to get it to them without having to go there yourself. Also, at you can sign up to donate. They have a great system where you let them know what you are willing to donate and when they need those things they contact you. This eliminates the time they would need to take to process donations as well as making sure they're getting what they really need.

Donate Time

Many people out there may not have extra money or clothes to give but can afford to spend a weekend helping out by volunteering their time. While you never want to simply show up to a disaster and ask to help there are some more structured ways to do something like that. Again with the help of the great website you can fill out an application to volunteer. By giving your skills and other basic information they will match you up with the groups that need your help.

Other Ways to Help

-By going to you can purchase some great looking t-shirts where 100% of the proceeds go to wildfire relief efforts across the state.

-Animal shelters are almost always accepting volunteers. The large animal shelter at Norris-Penrose Equestrian Center in Colorado Springs needs volunteers. Contact them at 719-520-7773.

-Text HIGHPARK to 80108 to donate $10 for fire relief in northern Colorado through The mGive Foundation @

-Hold a yard sale or put on a fund-raising event and donate money raised to a voluntary organization responding to this disaster.

These are a few simple but very effective ways to help out those in our state that need it. Every little bit will help them adjust and cope with the horrible situation they are fighting. We all need to keep them in our thoughts and help any way we can. If you have any questions about donations or volunteering please feel free to contact me. Pray for rain!