Tax on investment property?

Question

Scenario: For simplicity, assume that my sould source of income for 2007 is the capital gains realized from a single real estate investment transacted through an LLC wherein in am the single manager (purchase a California single-family home for $175K, spend $13K on rehab and sell 2 months later for $260K net.)

Question: What are the federal and state tax consequences of this scenario?

Thanks!

Answer 1

That's a short term capital gain of $72k and is taxed as ordinary income.