What are the current capital gains tax rate when flipping a house?

Question

Does anyone know what the current capital gains tax rate is when trying to flip a house? Is the tax rate dependent on the profit made on the sale? Say I "flip" a house this fall....do I have to declare the profit on my taxes come the end of the year?

Any and all advice is much appreciated.

Answer 1

250,000 per person, 500k for married person.

If the gain is long term, you are capped at 15%

If it is a short term cap gain, you will pay substantially higher taxes.

You can defer cap gains two ways:

1031 exchange or Private Annuity Trust.

Answer 2

the rules for your personal residence are separate for the rules from rental or investment properties. The 250,000/500,000 refers to how much profit a single person or married couple can make tax-free. You can do this every two years. Sell a personal residence before two years, and it's treated as an investment property -- with certain hardship exceptions.

Reagarding investment, if you sell a house before one year after settlement, the gain on the house is taxed at the tax rate for all your income. Regardless of the amount of profit, the amount of profit is added directly to your taxable income. You will deduct all the expenses that went into acquiring the loans and maintaining the house before flipping it and the expenses of selling it - this should reduce your profit.

If you hold a house longer than a year, the capital tax rate is lower, but that's not 'flipping.'

Answer 3

Your capital gains tax rate is depending how long you have that investment. If you have that house less than one year, then your rate is almost same as your personal income rate will be.
If you have that house more than one year, than it become long term investment. The rate will be about 20 %. except if your personal income rate is lower than 20%, then you may qualified for lower rate.
If you sell your house this fall, that will be taxable for year 2006, unless you use 1031 exchange. The 1031 will only work if the house is investment. Than you can sell this investment; buy another within 180 days.( you have to find the investments in 45 days)
You have think about selling house if you have this house less than one year. Consider your income tax rate and how much are you saving by paying 20 % capital gains tax, Check housing market at the area (Is it going down fast , how much will you loose by selling next year)..........
This is all I can tell you without detail of situation. Good luck.

Answer 4

It many times relies upon on how long you own the residing house. a house owned below a 12 months it is bought for earnings is many times taken care of as time-honored earnings, somewhat in case you do it returned and returned with extra properties. this skill that the earnings is subject to Federal earnings tax and self-employment tax. in case you purely did a unmarried residing house, you may wreck out with capital beneficial components tax only, which if so would be 15% of the earnings.

Answer 5

The flipping of property violates numerous federal statutes and is against the law. Probably not a good idea to advise a person who is the process of the commission of a federal felony.