Selling rental - capital gains tax?

[Kat Rathell]

We bought a duplex 7 months ago intending to rent it out. It was bought for cash from our home equity loan. We have now rehabbed the lower unit and found a tenant. They are moving in in 2 weeks. The upper unit will be move-in ready in 2 weeks.

Now, we are thinking of selling the property and buying another that just popped up on the market right next to our other property to consolidate our properties closer to each other.

Purchase price: ~$20K

Repairs/expenses: ~$5K

Sale price: $40K

Profit/gain: $15K

How will the profit of $15K be taxed? Or will we be taxed on the entire sale price of $40K?

If only the profit is taxed, does the $15K get taxed separately from our other income, or does it all add together with expenses to determine the tax % amount?

Will the tax be short-term capital gains tax or any other kind of tax?

Thank you!

[Natalie Kolodij]

1031 doesn't make sense at all for this situation. 

$15k is assuming no other costs. 

No purchase or selling costs related to this property. 

If it is indeed $15k it will be ST capital gain, and as mentioned above it's based on your ordinary income tax bracket.