I know nothing about real estate taxes. My husband and I are interested in "flipping" a house. We are trying to figure out if it's worth it after capital gains tax. For example; how much in taxes would we pay if we purchased a house for $100k and sold it for $130k. We make about 100 grand a year combined from our jobs. Thank you
I would need to write a book. Spend the next six months educating yourselves and then think about this plan again.
Flipping means as you said an investor would buy a house for cheap and slap on a coat of paint and to a not knowledgeable buyer would sell the home to them higher than what it's worth. If they had a real estate agent then the agent would know more about what homes are selling for in that area. What makes flipping illegal is that you wouldn't as an investor be able to prove all the recent enhancements you added and the cost of them. Plus flipping increases the costs of homes in an area and makes them unaffordable to some people. You on the other hand aren't flipping. You are thinking that maybe over the years your property has gained in value. The 2008 mortgage fiasco the USA and world suffered lowered the value of homes. I'd say your best bet would be to get yourself a realtor or real estate agent familiar with your area who would price it accordingly. Once it's sold you'd talk with your CPA with regard to doing your taxes.
