Letter: Unrealized capital gains tax bad for home, business owners
The “Unrealized Capital Gains Tax” bill being pushed by Kamala Harris proposes that a tax be levied on the increased value of business, land holdings and YOUR HOME, EVERY YEAR!
For example, If you opened a business that had an evaluation of $1 million and the following year that evaluation jumped to $1.5 million, you would be taxed of that increased value come tax-time.
Even if you have no intention of selling.
Hence the name, “The Unrealized Capital Gains”.
Unrealized means you don’t actually get to spend the increased value; it’s just “on paper”.
Could there be a faster way of running business out of America? The equity I’ve developed in my home is my retirement.
If I have to pay this new tax every year I would be forced to liquidate, giving up my claim to “The American Dream” of being a home-owner!
Consider this.
A bill was just passed and made law, that when a home is put up for sale, the commissions paid to professional real estate brokers to guide Buyers & Sellers in probably the most important transactions of their lives, are to be paid by each side of the transaction separately. Traditionally, those commissions were rolled into the transaction costs and paid from the Seller’s proceeds and generally pretty painless because of the increased equity the sellers were able to achieve.
This new law now requires that the potential Buyers must add the commission paid to their agent to the money they are already required to provide, i.e. cash down, closing costs, and now their realtor’s commission.
The buyer’s out-of-pocket obligation on a $500k home would be increased to an estimated amount of over $15,000!
The concern I have is how our government is making it harder and harder for citizens to own property!
These increased costs will make ownership for many unachievable and if homeowners are taxed on the “Unrealized Equity” of their homes, many will be forced to sell, especially those that live on meager pensions, Social Security, even if their homes have already been paid off!
Malcolm Whitney
Ogden