I bought a house in December for $68000 and just sold it (June 3) for $119000 in Colorado. After improvement costs, closing costs, commissions etc. I netted about $18000. What would be my capital gains tax be and when would I have to pay it?

This would be a short-term capital gain, so is taxed as ordinary income to you. If you have any capital losses you can offset some or all of these gains with those losses. You pay this when you figure your taxes for 2008, due in April 2009. However, you may want to consider paying a few thousand now as an estimated 2008 tax payment, so as to avoid any risk of having an underpayment penalty next April.

Did you LIVE in the house as your primary home?

If so, WHY did you move?

These answers are critical because, if it was your primary home, but you moved for reasons of health or another qualifying reason, you can exempt the entire $18,000 from your income tax.

You STILL have to report the sale on Schedule D and provide justification for the move, but it worth looking into.