Big Home Sales, Big Tax Savings

By Les Christie

Sales of luxury homes spiked in the final months of 2012, as high-end homeowners rushed to take advantage of lower tax rates before Jan. 1.

By selling their luxury homes before the end of 2012, these wealthy homeowners avoided two tax increases on Jan. 1 and a huge payout to the IRS.

Not only were these sellers concerned that fiscal cliff talks would lead to a hike in the capital gains rate, but many were already facing a 3.8 percent Medicare surtax on investment income slated to go into effect in 2013 as part of the Affordable Care Act.

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