The 3.8% "real estate tax," home equity lines and more -- Sunday reading

Have you been getting lots of emails warning you about the 3.8% tax that you'll pay on your house sale? Your worries are over -- L.A. Times explains it all for you here.  For those of you that don't want to read the whole article, here's the dope: "Say you and your spouse have adjustable gross income (AGI) of $325,000 and you sell your home at a $525,000 profit. Assuming you qualify, $500,000 of that gain is wiped off the slate for tax purposes. The $25,000 additional gain qualifies as net investment income under the healthcare law, giving you a revised AGI of $350,000. Since the law imposes the 3.8% surtax on the lesser of either the amount your revised AGI exceeds the $250,000 threshold for joint filers ($100,000 in this case) or the amount of your taxable gain ($25,000), you end up owing a surtax of $950 ($25,000 times 0.038)." A surtax of $950 on a $525k profit? Stop complaining.

And from Gretchen Morgenson at the NY Times, here's a column about the looming equity line of credit resets -- just when you think everybody's first mortgages are no longer such a problem, up pops the resetting interest rates on the LOCs, which are mostly 2nd mortgages.  My take is that the LOCs' interest rates were always higher because they are riskier.  Shouldn't the lending institutions take on some of this risk?

Good Articles from Sunday's New York Times

Here are links to a couple of good real estate articles in today's (April 13) New York Times Business Section. The first, by columnist Gretchen Morgenson, is entitled "So You Thought You Had an Equity Line" and is about the increasing bank freezes of home equity lines of credit . Yikes. The second is from sometime-tv-star Ben Stein (see my post on him from February), and is yet another call -- from a Republican, no less -- for more regulation of the financial markets.