Question on short term capital gains tax how much will i pay in taxes?

Question

ok i bought i home 4 months ago for 178k now i had it appraised after i flipped it at 255k and have to offers of roughly 248k and 249k how much taxes will i have to pay on my profit does anyone know i need to know so i can see if im better off renting it out or moving into it.

Answer 1

It depends on your AGI but  long-term capital gains are taxed from a minimum of 5% to a maximum of 15%. Short term capital gains are taxed as ordinary income so it would depend on what tax bracket you are in.

Answer 2

First you must determine what your gain may be.  In addition to the 178k you paid you must have cost of repairs/improvements and any cost of sale that you might have.  With that added you have the basis and the difference between the basis and the sales price in your gain.  It being short term gain will become ordinary income adding to your AGI.  Since we don't know what the AGI would have been without the gain there is no way to determine the income tax.  You would do well to estimate 35 percent for federal and calculate your state income tax at it's highest rate.    

Answer 3

There is going to be no way to exactly answer this.  See a professional.

If the house increased in value due to work that you put in to it (so called sweat equity) the income should be reported on Schedule C as self-employment income and not capital gain.  Your tax would be your marginal rate (up to 35%) plus self-employment tax (up to 14+%) plus state tax.  A lot depends on your other income how much you will pay in to social security for the year from the other income.

If it was just an investment that increased in value, the gain will be taxed at up to 35%.  The exact rate would depend on your other income.

Like I said.  See a professional.