For Immediate Release
Contact: Gigi Thompson Jarvis
firstname.lastname@example.org, 202.822.6232, x119
Expiration of Capital Gains Cut Extension Could Affect Home Sellers
WASHINGTON, DC (February 1, 2012)—US homes sale prices continued to slide downward in November. Both the Case-Shiller index of 10 major metropolitan areas and the 20-city index fell 1.3 percent from the previous month. Sound like a good time to sell? Maybe not for many people, but for some well-heeled homeowners the tax benefits of selling this year rather than next year may be worth a potentially lower sales price.
Now that the reduced capital gains rates are set to expire along with the two-year extension of the Bush tax cuts, homeowners with gains on personal residence sales that exceed the exemptions may get stuck with a higher capital gains rate in 2013 than they would if they sold now. This could be a factor in a decision to sell sooner rather than later.
"The long-term capital gains rate is scheduled to return to the pre-Bush rates, generally 20 percent, and while there's a good chance that the lower rate will be extended again, there is no guarantee," said Robert Kerr, Senior Director of Government Relations for the National Association of Enrolled Agents (NAEA). "Taxpayers with high incomes are even less assured of this eventuality."
While President Obama has reinforced his commitment to extend tax breaks for small businesses and start-ups and a short-term extension of the payroll tax cut seems imminent, the future of the capital gains tax cut is still unclear. Most Americans, however, can take heart that it probably won’t affect them: the President has proposed increasing the top tax rate on qualified dividends and long-term gains from 15 percent to 20 percent only for those earning more than $200,000 individually or $250,000 jointly.
Your tax consultant should be able to advise you how to best plan to reduce your tax burden as much as possible, but to ensure you’re doing all you can, don’t wait until filing time to check in with him or her. The National Association of Enrolled Agents (NAEA) recommends taxpayers resolve that in 2012 they will make sure they receive every tax benefit they are entitled to by touching base with their tax preparers during the tax year.
About Enrolled Agents
Enrolled agents are tax professionals licensed by the US Department of the Treasury to represent taxpayers before all administrative levels of the IRS. While attorneys and certified public accountants are also licensed, only enrolled agents specialize exclusively in taxes. Enrolled agents are required to complete many hours of continuing education each year to ensure they are up-to-date on the constantly changing tax code and must abide by a code of ethics.