Capital Gains + State & Federal???
I'm a 25 year old Journeyman Carpenter and my wife is a Realtor. We have successfully "flipped" two homes on the side now. We lived in each house two years to avoid capital gains. I did 100% of the work myself, made $40,000 on the first home and $30,000 on the latest.
Each of these homes produced a profit as large as my yearly salary and required MUCH less labor then a standard 2000 hour work year. Due to this I've decided to work 3 more years, build up a sufficient bank roll then quit my job as a Carpenter & become a full-time Flipper.
Of coarse I have tons to learn before embarking on this but I have all the enthusiasm and motivation in the world!
My Question:
Say I flip 3 houses in a year and earn $90,000 in total profits. I realize uncle same is taking 25 ish% for capital gains since I'm not holding them over a year but will I also have to pay federal and state income tax and if so what's the total % taken out of my "flipping profits" for taxes?
* I will be contacting an accountant... right now I'm just trying to soak up all the knowledge I can