Income Tax vs. Capital Gains tax?

Hi All:

Last year I sold a property that I owned for 3 months. Someone told me that I would have to pay income tax instead of capital gains because I owned it less than 6 months. They said income tax is charged at a higher percentage. Is this true? Please clarify.

Thanks
dlmcgill

You’ll pay short term capital gains tax,which is taxed as ordinary income on assets held less than a year.

Anything held over one year is considered long term and taxed at a flat 15 percent,plus any state taxes that apply.

Kevin

Thanks for your response Kevin. And of course that short term capital gains can be offset by repair expenses, correct?

dlmcgill

Yes,by all means.Other losses you may have,excluding this property will also offset your gains and hopefully place you in a lower tax bracket.Good luck!

                         Kevin