Avoid tax confusion in future real estate sales

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

During the recent spring break, we visited with family and friends who were considering real estate purchases and sales.

One couple was selling their primary residence, a modest brick Tudor in an established suburban neighborhood, and buying a "maintenance free" condominium downtown.

Another couple, their three children now grown and gone, was looking for a smaller home nearby where they could grow vegetables and flowers. Gardening is their passion.

A brother-in-law, a retired stock broker who now monitors and conducts his trades from home, said he was planning to sell his split-level home in the next two years because "all real estate would be taxed more in 2013."

He is not alone in his thinking. The truth, however, is that only a small percentage of home sellers will pay the new 3.8 percent tax on some investment income that will take effect in January 2013. The new tax will not apply to a vast majority of the p...