StreetEasy: Talk - New 3.8% Real Estate Tax on Profits

As part of the new healthcare law, there is a new tax of 3.8% on January 1 on profit from real estate. (Explained below). Without devolving into partisan discussion, what are people's thoughts about how this will impact the real estate market in Manhattan? Are there owners who are still earning gains that are that substantial from their sales? I don't imagine we'll see these cases often, but I wonder why this provision was included in the law if it's so uncommon.

An Example from the Washington Post and National Association of Realtors: "Say you and your spouse have adjustable gross income (AGI) of $325,000 and you sell your home at a $525,000 profit. Assuming you qualify, $500,000 of that gain is wiped off the slate for tax purposes. The $25,000 additional gain qualifies as net investment income under the health-care law, giving you a revised AGI of $350,000. Since the law imposes the 3.8 percent surtax on the lesser of either the amount that your revised AGI exceeds the $250,000 threshold for joint filers ($100,000 in this case) or the amount of your taxable gain ($25,000), you end up owing a surtax of $950 ($25,000 times .038)."

http://www.washingtonpost.com/realestate/health-care-laws-38-percent-surtax-will-not-affect-many-home-sellers/2012/07/12/gJQATidFgW_story.html

Source: http://streeteasy.com/nyc/talk/discussion/33093-new-38-real-estate-tax-on-profits

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