Potential tax reform under the President elect and how that may affect property owners

Political feelings aside, there are whisperings of potential changes in the tax code under the President elect, that may have a significant affect on property owners looking to unload in the coming year. Since the election, I’ve been receiving phone calls from many clients I met with in the past, who are now rethinking whether it might be an advantageous time to sell that investment property or family estate, that they’ve been holding onto. Additionally, those looking to sell their primary residence and cash in on property values may also be facing lower tax brackets and a reduction of 3.8% in capital gains, which currently goes towards the Affordable Care Act. If the incoming President follows through with his proposed plan to eradicate the Affordable Care Act, then the capital gains tax will be lowered by 3.8%. See the following excerpt from Trump’s proposed tax plan:

Brackets & Rates for Married-Joint filers:
Less than $75,000: 12%
More than $75,000 but less than $225,000: 25%
More than $225,000: 33%
*Brackets for single filers are ½ of these amounts

The Trump Plan will retain the existing capital gains rate structure (maximum rate of 20 percent) with tax brackets shown above. Carried interest will be taxed as ordinary income.

The 3.8 percent Obamacare tax on investment income will be repealed, as will the alternative minimum tax.

It will be interesting to see how this unfolds, and how it might affect the market. Stay tuned.

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