We successfully flipped a house and had it for 2 years. How do we determine how much money to put aside for taxes?

@Eric Doe I can't recommend enough hiring a CPA. They will save you far more money than they cost you. They will also save you tremendous time.

That being said, it's still worthwhile familiarizing yourself with the tax code. NOLO put out a great book covering tax:

https://store.nolo.com/product...

@Dave Spooner we definitely will get a cpa. I was just trying to get maybe a quick rule of thumb since we are looking at purchasing another house very soon.

@Eric Doe Got it. It's pretty hard to say because so much is dependent on the kind of work you did and how you classify it. Are you wondering how much to set aside for taxes in the event of a sale? Have you occupied the property at any time? Do you intend to do a 1031 Exchange?

@Dave Spooner yes exactly. We did a house hack, sold it and received our profit.

@Eric Doe You can defer a lot of the tax if you do a 1031 Exchange. If it's not too late, I would highly advise it. It's a great way to allow you to continue investing in additional properties. 

And did you ever live in the property? That will also make a huge difference. Otherwise, it will simply impact your income and you will pay based on your income tax level that year. 

@Dave Spooner yes we lived in the house for over 2 years and recently just closed on it.

@Eric Doe That's great! You have significant tax advantages. Here's an article that does a good job breaking it down:

https://www.investopedia.com/a...

@Dave Spooner awesome! Thank you

Originally posted by @Eric Doe :

We successfully flipped a house and had it for 2 years. How do we determine how much money to put aside for taxes?

Depending on your tax bracket, flipping income is taxed at almost 50%. I suggest talking to a tax pro to reduce this burden. 

@Ashish Acharya we definitely will do that.

@Eric Doe

Sale of Capital Asset
Federal taxes - 0%, 15% or 20%. There is also a potential 3.8% Net Investment Income Tax
State Taxes - Dependent on state

Sale of Real estate that is considered Inventory
Federal Taxes - up to 37%
State Taxes - Dependent on state
Self-Employment taxes - up to 15.3%

If it was a personal residence prior to sale, some or all of the tax from gain may be excluded.

@Basit Siddiqi it was my primary residence for over 2 years. Would this mean I could possibly be expept?

Originally posted by @Eric Doe :

@Basit Siddiqi it was my primary residence for over 2 years. Would this mean I could possibly be expept?

No one can really give a good answer until they know everything you did with this property. You have mentioned that it was a house hack, you also called it a flip, and you have also indicated it was your primary residence. 

More details are needed. Is the property a single family home or multi-unit? Was the property a rental and then your home? Part rental, part home? When did you last avail yourself of the primary residence gain exclusion? This all matters.

@Michael Lynch I was under the impression of a house hack being a single family as well as a multi. Just read the term and seen it just applies to multi family. Long story short, we lived in this single family property for more then 2 year, as we lived in it we renovated it, gained equity then sold.

@Eric Doe Completely agree with @Dave Spooner a CPA is worth every penny. Have you considered a 1031 to postpone the taxes? 

As far as calculating - did you live it for the last 2 years as you flipped it. Because that would help you avoid the taxes completely. 

@Ryan Thomson yes we lived in the house for over 2 years

@Eric Doe

You "short stories" are not helpful, and they change as you tell them. Give us the long story. :)

When did you buy it, exact date? When did you move in, exact date? Did you have any tenants? If yes, the exact dates and what exactly did they rent? Anybody besides you lived there, ever? When did you move out, exact date? When did you sell, exact date? If the last two dates are not the same, what was going on with the property between you moving out and the sale? What was the purchase price, the rehab cost, and the sale price?