Minnesota Personal Gains Tax for a Newbie

[Account Closed]

Hello again BP,

We are considering finding a home and Move-in/Flip/Sell/Move-out in roughly a year, maybe less depending on how well it goes. 

I am not understanding the capital gains tax for Minnesota. Am I taxed at my current tax rate on the proceeds of (Sale - Purchase) Or Profits - (Purchase + Expenses)?

Is there a state and federal gains tax?

The way I am reading it and just throwing random numbers:

Purchase 120K, 6K to close, 20K for the flip. 

Sell for 180K est 3% fees of $5400. 

24% Tax Rate on the profits of $21,376 =  $5130. Actual return of $16,606. 

With the info either way, do I even care about the tax rate? Assuming I repeat the deal, is it worth hanging out for another year to save the cap gains tax and miss out on making another 16K off of the next home?

How do I deal with finding discount materials to get ahead? Do I claim i paid $40/gallon on paint because that's retail? Or do I claim that I actually bought 10 gallons of someones mistake for $4/gallon, and then get penalized for trying to save money?

I'm all for paying taxes IF it benefits the greater good...but when it funds a stadium for a team to consistently choke in, that's a bit of an issue!

Thanks in advance! Hope everything makes sense, having a harder time explaining it than it is to read it.

[Dan Vleck]

Fyi, unless you’re a realtor, I think you are underestimating sell cost.

I believe you will find state capital gains will be taxed as personal income at whatever bracket you are in.