Profile picture for Philly29

How much in taxes do I have to pay if I flip a property in PA in the same year as I purchased it?

I purchased a property in June 2014 in Philadelphia, PA for $115,000. I put $45,000 in to the place and plan to list it next month for between $210,000 & $230,000. If I am all in for $160,000 and can sell for say $210k, how much cash will I walk away with after realtor fees (figure 6%), capital gains tax, and other misc fees?

I know the taxes can vary and would like to know what to expect when I sell. My accountant mentioned doing a 1031 and rolling the profit into another property, but I may not purchase another property until next year. 
  • July 22 2014 - Philadelphia
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Answers (2)

Profile picture for CallTheSisters
If you bought a government foreclosure you have to hold for a specific period of time before you can sell and then the level of profit is capped.  I'm not familiar with all the rules so you need to consult with your realtor or real estate attorney.  It should have been spelled out in your closing documents.

As far as transfer tax you pay if on the sale price not the net.  If it sells for 230K you pay real estate transfer tax on that amount.  Check with the taxing authority to see what the rate is.
  • July 22 2014
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You may want to talk to a Realtor and/or Real Estate Attorney. There are some rules in place regarding purchasing a home and turning around and selling it for so much more very quickly. I don't know the details of the house or what work you did to be able to counsel you. If you're talking property tax, you only pay taxes for that period of time you owned it. As far as income taxes, your accountant would be the best person to ask.
  • July 22 2014
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