PROPOSED REAL ESTATE TAXES WILL AFFECT YOUR FUTURE

May 26, 2010 at 5:56 pm Leave a comment

By: Maria Hass

Lawmakers are considering changes to the tax code in order to pay for a number of tax provisions expiring in 2010. Two of these provisions would impact real estate.

The first would require all owners of rental properties to file IRS 1099 forms for all contractors they do business with if they pay that contractor $600 or more in any given year. This proposal applies to any landlord even with one rental property. The proposed real estate tax will add further costs to the “little guys,” many of whom are holding on to their rental properties despite a negative cash flow in hopes the market will rebound. Any additional taxes imposed on the “small guys” are untimely and unwarranted. A majority of homeowners are losing a lot of money on their homes.

Regarding the second provision, on December 9, 2009, the House of Representatives passed the Tax Extenders Act of 2009 (H.R. 4213), also known as the “carried interest” bill. The tax bill would govern how general partners in real estate investments pay taxes when the investment is sold. The president proposes to tax the income from so-called carried interest as ordinary income rather than as capital gains as under current law. Ordinary income is subject to marginal rates up to 35% (39.6% in 2011) while income from capital gains is taxed at a maximum rate of 15% (20% in 2011), so Obama’s proposal amounts to a tax hike. The proposed bill is awaiting Senate debate.
These new tax burdens will further delay the real estate market recovery and are ill-advised, inopportune and potentially destructive.
Please contact your Congress members today and tell them to oppose these provisions.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate. Tags: , , , .

What Should a Buyer Expect When Buying in Today’s Real Estate Market? Realty Executives Sues Former President

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Categories

Feeds


%d bloggers like this: