Avoid tax confusion in future real estate sales

2013 changes will affect small share of sellers

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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 population.