Hello! Newbie here. Looking into my first house and had a question about that taxes in NJ. Someone said something about Capital Gaines Tax in NJ? Anyone have an idea of what that percentage looks like?
For a”flip”, cap gains do not apply....it’s ordinary earned income tax along with self employment ss/med(15.3%).
Spending an hour with a CPA who understands your overall financial situations would be time well spent, but there are some general rules of thumb:
If you hold the asset for less than one year, your profits are considered short term capital gains - which are taxed as ordinary income at your standard tax bracket rate.
If you hold the asset for one year or more, you pay long term capital gains tax, which is most likely 15% (but depends on your total annual income and filing status).