Comments on: how does Capital Gains Taxes work when you are flipping houses? http://www.flipthishouseblog.com/how-does-capital-gains-taxes-work-when-you-are-flipping-houses.php Tips and tricks on flipping homes Thu, 16 Jul 2009 15:22:06 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: wanosd http://www.flipthishouseblog.com/how-does-capital-gains-taxes-work-when-you-are-flipping-houses.php/comment-page-1#comment-44 wanosd Tue, 29 Jul 2008 19:39:02 +0000 http://www.flipthishouseblog.com/how-does-capital-gains-taxes-work-when-you-are-flipping-houses.php#comment-44 If you sell within a year or less, that's taxed at your regular tax rate. If the time you buy and sell is more than a year, you will be at a long-term capital gains tax rate, which is less. However, if you live in that house for at least 2 years within the past 5 years, prior to it being sold, you can get up to $250,000 capital gains tax free if you are single, or $500,000 if you are married. This is assuming you have not used up this benefit for another house within the past 2 years or so. This is at the federal level. It may be different at the state level for the short-term and long-term tax rates. If you sell within a year or less, that’s taxed at your regular tax rate.

If the time you buy and sell is more than a year, you will be at a long-term capital gains tax rate, which is less.

However, if you live in that house for at least 2 years within the past 5 years, prior to it being sold, you can get up to $250,000 capital gains tax free if you are single, or $500,000 if you are married. This is assuming you have not used up this benefit for another house within the past 2 years or so.

This is at the federal level. It may be different at the state level for the short-term and long-term tax rates.

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