3.8% Medicare Surcharge Tax Can Be Avoided Thru 1031 Exchange

Obamacare, as the Healthcare Act has been nicknamed, included a little known provision called the Medicare Surcharge.  The Medicare Surcharge has been incorrectly referred to as the Real Estate Sales Tax.  In any event, it is a new tax of 3.8% assessed when certain taxpayers sell or dispose of real estate.   

I will not go into details regarding the 3.8% Medicare Surcharge, but wanted to quickly communicate to the Bigger Pockets community that the Department of the Treasury recently ruled that the Medicare Surcharge of 3.8% CAN be deferred through a 1031 Exchange transaction.