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The long anticipated restoration of the Section 502 single-family rural housing program is headed to President Obama's desk for signature into law. NAR has been working on restoring funding since March. Although the legislation increases the guarantee fee for borrowers, the fee can still be financed. This change will make the program completely self-sufficient. The legislation also increases the Rural Housing Service (RHS) commitment authority allowing guaranteed loans. Previously RHS had been providing conditional commitments. RHS will announce new guidelines shortly after the President signs the bill.
Visit NAR's page for more information on NAR advocacy on this issue.
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NAR recently announced the launch of the REALTORS® Dental Insurance--dental plans designed exclusively for NAR members and their families. Plans provide coverage for preventive, basic, and major dental expenses with the dentist of your choice. There are 4 plans to choose from and most plans include bonus benefits like orthodontia, cosmetic, dental rewards, and more.
REALTORS® Dental Plan Benefits
Over 300 covered procedures. Highlights include:
- Preventive Dental Benefits (no deductible): Routine exams, cleanings, fluoride treatments, sealants, and more.
- Basic Dental Benefits: Full mouth X-rays, bitewings, filling restoration, simple and complex extractions, surgical removal of teeth, deep sedation/general anesthesia, and more.
- Major Dental Benefits: Available with Platinum, Gold, and Silver Plans only. Onlays, maxillary partial denture – resin base, denture repair, endodontics – root canal, periodontal scaling and root planning, crown and crown repairs, pontics - porcelain fused to noble metal, and more.
Learn more at http://www.realtor.org/realtor_benefits/benefits_partners/dental_insurance.
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The 2010 MAR Nominating Committee would like to present the following slate of 2011 MAR Officers and Directors for consideration by the MAR REALTOR® Membership:
Slate of 2011 MAR Officers and Directors
President: Dee Denton, Jackson
President-Elect: Watkins “Noggin” Wild, McComb
1st Vice President/Southern District Vice President: Ken Austin, Pass Christian
Central District Vice President: Michele Rumbley, Madison
Northern District Vice President: Norma Cother, Tupelo
Treasurer: Adam Watkins, Hattiesburg
Immediate Past President: Tony Jones, Olive Branch
DIRECTORS-AT-LARGE
District 1 Director-at-Large: Andrea Cummins, Oxford, term expires 2013
District 2 Director-at-Large: David Griffith, Cleveland, term expires 2013
District 3 Director-at-Large: Trish Fleming, McComb, term expires 2013
District 4 Director-at-Large: Martin Jones, Gulfport, term expires 2013
In accordance with the Mississippi Association of REALTORS® Bylaws, election of MAR 2011 officers/directors will occur via online voting. Online voting will open at 12:00 a.m. on Friday, August 27, 2010 and will close at midnight on Friday, September 10, 2010. Any active REALTOR® member of the association is eligible to vote in officer/director elections.
Instructions and password for online voting will be mailed to you very soon. When you receive your letter, please put it in a safe place, because this information is essential to cast your vote.
Thank you for your participation in our organization.
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John Dean of Leland, national RLI Past President was recently awarded one of two Accredited Land Consultant (ALC) National Transaction Networking Awards. Dean was recognized for his work on a networking deal with Florida ALC member Ben Crosby after they met at the 2009 National Land Conference in Nashville. As a result of their meeting, the two negotiated the sale of a 620-acre farm tract worth more than one million dollars. The Accredited Land Consultant designation is conferred to those REALTOR® Land Institute (RLI) members who achieve the highest level of education, experience and professionalism.
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In an effort to keep our membership informed of the specifics and true impact that the new 3.8% real estate tax might have on homeowners, MAR is providing two trusted sources concerning the subject. Find below some FAQs provided by the National Association of REALTORS® and an article written by Brooks Jackson of factcheck.org that help explain the details of the tax.
NAR answers questions on the 3.8% real estate tax
Q. Is there a real estate "sales tax" or a transfer tax in the new health care bill?
A. No, there is neither a real estate "sales tax" nor a transfer tax in the bill.
Q. What new taxes are there in the health care bill that will impact property owners?
A. There is a new 3.8% Medicare tax for "High Income Filers," defined as an individual who files a single return with Adjusted Gross Income (AGI) of more than $200,000 or a married couple with AGI of more than $250,000.
Q. When does the new 3.8% Medicare tax take effect?
A. The new Medicare tax will take effect January 1, 2013
Q. How is the new 3.8% Medicare tax calculated for high-income filers?
A. The new 3.8% Medicare tax is assessed only when the $200K/$250K AGI limits are exceeded. The net investment income that will be subject to tax is the LESSER of (1) net investment income OR (2) the excess of AGI over the $200K/$250K AGI limit.
Investment income includes: capital gains, rents, dividends, interest and business income earned by shareholders or partners not active in the business. Net investment income is investment income minus any allowable expense deductions.
Q. How will property owners be affected by this new tax?
A. Keeping in mind the income limitations above, real estate income that will be affected for high-income filers include:
- Sale of a primary residence: If the gain from the sale of the property is below $250,000 (individual)/$500,000 (couple) NO tax will have to be paid on the gain. The new Medicare tax would only apply to any gain realized over the $250K/$500K existing primary home exclusion that will bring the filers AGI over the $200K/$250K limits.
- Second Home/Investment property: The additional 3.8% tax will apply to the portion of the gain realized on the sale of a second home or investment property that will bring the filers AGI over the $200K/$250K limit.
- Rental Income: The portion of net rental income that exceeds the $200K/$250K AGI limits will be subject to the new 3.8% tax.
Q. Will "High Income Filers" also see a reduction in the amount of Mortgage Interest they are allowed to deduct?
A. No, there was not a cap on itemized deductions included in the final health care bill.
View Brook Jackson's bio.
Below is Brooks Jackson's explanation of the real estate tax:
Q: Does the new health care law impose a 3.8 percent tax on profits from selling your home?
A: No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won't be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few - those with high incomes from other sources.
Full answer:
We've been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false.
The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won't apply to the first $250,000 on profits from the sale of a personal residence - or to the first $500,000 in the case of a married couple selling their home.
We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on "net gain ... attributable to the disposition of property." That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is "taken into account in computing taxable income" under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn't apply to vacation homes or rental properties.)
The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 139 of its report on the bill. The note states: "Gross income does not include ... excluded gain from the sale of a principal residence."
And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. "Some home sales would see a tax increase under this bill," Ahern told us, "but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple)."
So there you have it. The sort of people who would have to pay the tax might include, for example:
- A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
- An "empty nester" couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy.
However, a typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors. Obviously, none of those sales could possibly generate a $250,000 profit, and so none would be subject to the tax.
Thus, for the vast majority, the 3.8 percent tax won't apply. The Tax Foundation, in a report released April 15, said the new tax on investment income (including real estate) "will hit approximately the top-earning two percent of families" when it takes effect in 2013.
Footnote: Some of the chain e-mails that claim ordinary home sales will be taxed include a copy of an article written by Paul Guppy, a policy analyst with the conservative Washington Policy Institute (that's Washington state, not Washington, D.C.). The article appeared March 28 as an op-ed in the Spokane, Wash., Spokesman-Review, and Guppy claimed that "[m]iddle-income people must pay the full tax even if they are 'rich' for only one day." That brought a quick rebuttal from Sara Orrange, the government affairs director of the local Realtors association. She wrote a letter to the newspaper calling Guppy's article "inaccurate" and saying, "Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made." In a news article the next day, business reporter Bert Caldwell confirmed thatonly "a very few" home sellers would pay the 3.8 percent tax.
The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller's "main home" for at least two years out of the five years prior to the sale.
- Brooks Jackson
Sources
Joint Committee on Taxation. "Technical Explanation of the Revenue Provisions of the 'Reconciliation Act of 2010,' As Amended, In Combination with the 'Patient Protection and Affordable Care Act.'" 21 Mar 2010.
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