3.8% Obamacare tax on investment income (Royalties and Lease Bonus)

From SmartMoney.com: "To add insult to injury, a new 3.8% Obamacare tax on investment income collected by higher-income folks is also scheduled to take effect next year."


For 2013 and beyond, higher-income individuals may also be hit with an additional 3.8% Medicare tax on all or part of their net investment income, which is defined to include long-term gains and dividends. The recent Supreme Court ruling paves the way for this new tax. Net investment income for purposes of the additional 3.8% Medicare tax means:The sum of: 1. Net gains from property held for investment (including the taxable portion of gains from selling personal residences). 2. Gross income from dividends. 3. Gross income from interest. 4. Gross income from rental activities. 5. Gross income from royalties.6. Gross income from annuities. 7. Gross income from passive business activities.


Publisher note: Can we please put "higher-income" in quotes. Many mineral owners receive a large one time bonus and do not see those income levels again. For example, if you own 50 acres and received a one-time $5,000 bonus, the 3.8% obamacare tax would grab an extra $9,500.

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Comment by Richard Lee on October 29, 2012 at 1:44pm

This assumes that you had other income of $250,000. The tax is only on the investment income over $250,000 AGI. It is unlikely Romney woud be able to repeal this tax. It would require 2/3 in the Senate.

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