When you -- and the IRS -- flip a condo

It's the flipper's dream. You buy a condo, put in lots of hard work and sell it for a big profit. If you're not careful, though, most of the gain could go to your Uncle Sam.

My friend Jimmy keeps telling me, “You can’t go broke taking profits.” And, he’s right. But it’s not what you make that counts -- it’s what you keep. If you're one of those lucky people who sold a condo almost as quickly as you bought it, I hope you thought about how much you could end up paying the IRS. It could be a lot.

Say you bought your condo for $150,000 and sold it for $250,000 two weeks later. You made a $100,000 capital gain. But say you didn’t hold the property for more than 12 months. That makes it a short-term capital gain. You'll pay a federal rate of as much as 35%, not the 15% long-term capital gain that investors have been frothing about. Add a state tax, say 5%, and you now owe $40,000 in taxes on your sale