Fix and flipping tax implications.

[Clay Teegarden]

Hello all! 

I currently have 2 single family rentals but am looking to delve in to fix and flipping as a way to supplement or hopefully replace my W2 income. 

I have 2 questions as it relates to taxes for fix and flipping. First, how does everyone handle the capital gains on a rehab project? I feel like I e read before that 25% of net profit is a good rule of thumb to set aside for those taxes, but what have you all found to be true? 

Second, if youre doing fix and flipping in addition to your W2 income, how does that factor in to your normal taxable income from your W2? Should you set aside additional money aside from capital gains to pay for the income tax increase if you make a profit on a property? 

Thank you in advance to any who reply, it’s appreciated!