If Congress doesn't act, the Bush tax cuts will expire at the end of the year. Just how much will families be affected if the tax cuts expire?
The maximum federal income tax rate on most long-term gains from real property sales would jump from the 15 percent to 20 percent, according to SmartMoney. A maximum rate of 18 percent, up from the present 15 percent, would apply to long-term gains from selling properties acquired after Dec. 31, 2000, and held for at least five years.
Starting in 2013, people with higher incomes could get hit with a new 3.8 percent Medicare surtax on part or all of their net income, according to the article. Net investment income includes the taxable part of gains from selling your home or vacation home. Sellers won't have to pay tax on up to $250,000 of the primary residence gain, or $500,00 for married joint filers, if the property has been owned and used as the primary home for at least two years of the five-year period.