Taxes On Sale
Can someone please tell me what my tax liability is on a rehab I'm about to sell off. The sale price is 135k and my adjusted basis is 92k. The difference is 42k (profit.) How is that 42k taxed? It was purchased in my own name 7 months ago if it is of any concern. I appreciate any answers.
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Gino,
You need to go to a tax advisor and CPA who specializes in real estate. That said, I believe it is taxed as short term capital gains.
Talk to your CPA about dealer transactions. On the surface you have a dealer transaction -- profits taxed as ordinary income and subject to self-employment income taxes, too.