Does Biden’s tax plan actually name for 40% tax on home sale earnings? Not true

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Among the hottest however fully unfaithful tales and visuals of the week embody this one, which is bogus. The Related Press checked them out. Listed below are the info:

CLAIM: Democratic presidential candidate Joe Biden’s plan for capital good points tax means when you promote your house you can be taxed 40% of the revenue.

THE FACTS: Social media customers have been sharing misinformation about Biden’s tax coverage.

The newest false declare states: “Biden’s capital gains tax means that when you sell your home you’ll owe taxes of 40% of your profit! Let that sink in!”

Tax consultants acquainted with Biden’s tax proposal say the submit is inaccurate for 2 causes.

For one, Biden’s proposal to lift the utmost capital good points tax price to 39.6% would solely apply to folks with incomes of over $1 million a 12 months.

“There is no increase in the capital gains rate for taxpayers with incomes below $1 million,” mentioned Eric Toder, an institute fellow and co-director of the City-Brookings Tax Coverage Middle.

The declare can be false as a result of Biden has not proposed making adjustments to current tax legislation, which makes the primary $250,000 in revenue you earn from promoting your main residence exempt from capital good points tax. The exemption goes as much as $500,000 in revenue for married {couples}.

“For most people when they sell their homes — unless they are turning a profit of more than $500,000 for a married couple, which is a lot — you don’t pay any tax on your gains,” mentioned Kathleen DeLaney Thomas, an affiliate professor on the College of North Carolina Faculty of Regulation. Thomas mentioned on account of that rule, a change within the capital good points tax price “is completely irrelevant” to earnings from a house sale.

Beneath Biden’s proposal, even somebody who earned greater than $1 million a 12 months wouldn’t be taxed 39.6% on the revenue of their house. That particular person would solely be taxed on any revenue from the sale past $250,000 if they’re single, or $500,000 if they’re married.


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