jump to navigation

Tax consequences of flipping houses March 19, 2007

Posted by W. Keoki McCarthy in flipping, real estate, taxes.
trackback

Here is a multiple choice test to see if you are up on the tax consequences of flipping houses.  I’ll give you a hint.  Most people get this one wrong.  If you do get it wrong, I’ll post a link to a great article I found that will help you.

You bought a house January 1 and fixed it up.  You put it on the market and sold it May 1.  There was a $100,000 gain.  What are the tax consequences?

A.     No tax as long as you invest the proceeds into another house of greater value right away. 
B.     Capital gains of 15%
C.     Ordinary income tax 25%-40% depending on your tax bracket 

 If you want to know the answer mouse over here

If you want to know why that is the answer read the article by Kay Bell

Advertisements

Comments»

1. The Property Pundit - October 2, 2007

That’s something that the shows on TLC and A&E never mention. Great point.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: