I have a question regarding taxes after selling a property. Lets say I sell a property and make 20,000 off it after all fees and agent commission, how is that 20,000 taxed if I want to cash out on it. And is that something I have to pay immediately, quarterly, or just by the end of the year.
Depends on if you have owned it for more than a year or not. Over a year its taxed as a long term capital gain, 15%. Under a year it is a short term capital gain, and it goes as ordinary income at whatever your tax bracket is. You pay all of them at year end.
I would always recommend consulting a qualified accountant that specializes in real estate investments before doing any major transactions.
There are a few things that you can do. When I was investing regularly, I opted to rather pull equity or 1031 exchange into another property to continually defer my taxes. If you want to pull some of that cash out, you can get a realtor's license and charge your company a listing or sales fee. If you structure it right you can defer a lot of your capital gain while having ordinary income only to the point that you can write it off from your "commission".
I now invest in oil and gas projects, and have found that the benfits on both my time and taxes are significant!
actually, it's 2 out of 5 years. and it can be the the first 2 years.