Am I estimating capital gains correctly?

[Julie Hill]

Hey all, I have 2 stupid q's:

1) I need to put aside $ from a flip we recently sold for capital gains.  I am calculating 20% from the net profit (we are in CO)... including AFTER holding costs and reimbursing our own $ that we also used to fund the flip.   basically the most bottom of bottom lines after every single expense is taken into account.  Is this generally the way this should be estimated?  And should I do a P&L for the flip to show all of this?  (would be easy to do because I have everything already in a spreadsheet)

2) When do we actually pay this?  When our CPA does our 2024 return next spring?  I know... really really stupid q but I tend to really overthink everything regarding taxes lol.  

TIA!! 

[Peter Mckernan]

Quote from @Julie Hill:

Hey all, I have 2 stupid q's:

1) I need to put aside $ from a flip we recently sold for capital gains.  I am calculating 20% from the net profit (we are in CO)... including AFTER holding costs and reimbursing our own $ that we also used to fund the flip.   basically the most bottom of bottom lines after every single expense is taken into account.  Is this generally the way this should be estimated?  And should I do a P&L for the flip to show all of this?  (would be easy to do because I have everything already in a spreadsheet)

2) When do we actually pay this?  When our CPA does our 2024 return next spring?  I know... really really stupid q but I tend to really overthink everything regarding taxes lol.  

TIA!! 

1. If you are flipping within 365 (holding less than 365) this will be ordinary income tax levels, so if you are 22% or 28% as an example you will be taxed at that amount. If you put it into an LLC it will be at the corp tax rate/state corp tax rate. If holding for longer periods it defaults to 20%.

2. You should have a 593 form from escrow that they held some money back, and then anything above what escrow holds above and beyond that amount your CPA will calculate to pay next April or October 2025 (depending if you push back the deadline/file extension).

[Basit Siddiqi]

Why aren't you asking these questions to your CPA?
He has more information on you than anyone else would.

Your tax rate will depend on how your accountant classifies the activities - Is it ordinary or capital gain?

Timing of payment will depend on if you are required to make estimated tax payments.

[Account Closed]

Quote from @Basit Siddiqi:

Why aren't you asking these questions to your CPA?

I believe it is because he wanted a quick answer from the community, you can't say that going to the CPA is easier than writing a thread in here

[Henry Clark]

Talk with your tax preparer.  

Your first question will be about “dates”.  That will help determine if Short term capital gain (ordinary income) or Longterm capital gains.  

Give your tax preparer your spreadsheets and they can go from there.  

Future thought.  Could you have lived in it for 2 of 5 years as primary to be tax free.  

[Basit Siddiqi]

Quote from @Account Closed:

Quote from @Basit Siddiqi:

Why aren't you asking these questions to your CPA?

I believe it is because he wanted a quick answer from the community, you can't say that going to the CPA is easier than writing a thread in here

Sure, but quick and correct are two different things. Also, why does he need a quick answer, is the need for his answer urgent?

No one on this forum will be able to answer his question unless he wants to provide his income tax information.

Capital gains at the federal level is either 0%, 15% or 20%.
He may have capital gain carryovers
It may potentially be considered a business and subject to ordinary income which would be at his marginal tax rates.
No one knows where the flip is done or in what state which impacts his state income exposure.