Tax Implications?
I recently purchased a piece of property with the intention of building a home for myself, but I have been offered a deal that is too good to pass up. A buyer is willing to pay me $30k more than what I paid 4 months ago. If I do this "deal", what kind of tax implications am I looking at? I would use the majority of the profit to pay off a home equity line of credit I have on my current residence. Any advice you can provide would be appreciated.
Simple. This is a short-term capital gain, subject to your income tax rate (federal and state), which will be pushed up due to the extra $30,000 in taxable income. It does not matter what you are going to use the money for, just as if you got a $30,000 bonus from your employer.