FY25 proposal to Capital Gains?

From the Forbes article:

"Biden administration’s main capital gains rate increase, and only apply to those individuals with taxable income above $1 million and investment income above $400,000. That isn’t quite as cataclysmic a policy shift as referring to a blanket 44.6% long-term capital gains rate would suggest."

It's all smoke and mirrors to keep the Proletariat thinking this administration is "taxing the rich" IMHO.
 
Exactly! If someone in California sells a home, does that put them into that category for that year?
 
Unless you are truly wealthy I would think most people would not sell their homes. Once you get over the 500k exemption you are paying upwards of 54% (44% fed + 10% CA) in taxes on the gain. The replacement home becomes to costly.

If you bought a home for $1M and sold for $3M you would get taxed 54% on the gain of $1.5M (after exemption). So a total in taxes or $810,000. So from your $2M gain you would walk away with a $1.19M in profit (excluding selling costs).

If want to buy another $3M house you need to come up with another $810,000. The cherry on top is another $20k a year in property taxes. That would be crazy.
 
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qwerty said:
Unless you are truly wealthy I would think most people would not sell their homes. Once you get over the 500k exemption you are paying upwards of 54% (44% fed + 10% CA) in taxes on the gain. The replacement home becomes to costly.

If you bought a home for $1M and sold for $3M you would get taxed 54% on the gain of $1.5M (after exemption) plus another 3.8% for the investment tax. So a total of 58% in taxes or $870,000. So from your $2M gain you would walk away with a $1.13M in profit (excluding selling costs).

If want to buy another $3M house you need to come up with another $870,000. The cherry on top is another $20k a year in property taxes. That would be crazy.
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I didn’t read the Forbes article :)
 
I just looked up the definition of the net investment tax on the IRS site and the gain from the sale of a home is excluded so it would not be subject to the additional 3.8% tax
 
qwerty said:
Unless you are truly wealthy I would think most people would not sell their homes. Once you get over the 500k exemption you are paying upwards of 54% (44% fed + 10% CA) in taxes on the gain. The replacement home becomes to costly.

If you bought a home for $1M and sold for $3M you would get taxed 54% on the gain of $1.5M (after exemption). So a total in taxes or $810,000. So from your $2M gain you would walk away with a $1.19M in profit (excluding selling costs).

If want to buy another $3M house you need to come up with another $810,000. The cherry on top is another $20k a year in property taxes. That would be crazy.
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And in Los Angeles they get to pay mansion tax too.
 
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