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Posted by Ted on December 3, 2006, 4:05 pm
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I am expecting a huge capital gains in a few weeks. If I put
it off until after the first would I get to hold onto the
taxes for an additional 12 months, or would I be obligated
to pay some sort of estimated taxes as soon as I get it? I
have already paid estimated taxes based on my 2005 income,
but this will be 50X higher.
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by Phil Marti on December 3, 2006, 10:55 pm
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> I am expecting a huge capital gains in a few weeks. If I put
> it off until after the first would I get to hold onto the
> taxes for an additional 12 months, or would I be obligated
> to pay some sort of estimated taxes as soon as I get it? I
> have already paid estimated taxes based on my 2005 income,
> but this will be 50X higher.
If your timely equal 2007 estimated tax payments plus
withholding are at least as much as 110% (maybe less) than
your 2006 total tax you can hold onto the rest of it until
4/15/2008. See IRS Publication 505.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Paul Thomas on December 3, 2006, 10:57 pm
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> I am expecting a huge capital gains in a few weeks. If I put
> it off until after the first would I get to hold onto the
> taxes for an additional 12 months, or would I be obligated
> to pay some sort of estimated taxes as soon as I get it? I
> have already paid estimated taxes based on my 2005 income,
> but this will be 50X higher.
If you're looking at a huge gain, and you can time in for
December or January, consider your income this year, as well
as next, before this extra gain is factored in. Also consider
what you are going to do with that money. The higher income
reduces itemized deduction amounts, so consider that as well
in your timing.
If you time the gain for January 2007, make sure you meet the
safe harbor for estimated for 2006 taxes, bank the rest in a
CD or something so it's available in 2008 when the bulk of
the taxes will be due.
Regardless, make smart decisions about what you do with that
gain money.
--
Paul A. Thomas, CPA
Athens, Georgia
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by ed on December 4, 2006, 5:57 pm
Please log in for more thread options Ted wrote:
> I am expecting a huge capital gains in a few weeks. If I put
> it off until after the first would I get to hold onto the
> taxes for an additional 12 months, or would I be obligated
> to pay some sort of estimated taxes as soon as I get it? I
> have already paid estimated taxes based on my 2005 income,
> but this will be 50X higher.
If you make the gain in 2006 you can wait to pay the taxes
on it until April `5, 2007 without any penalty. If you take
the gain in January 2007 the taxes on the gain will be due
April 15, 2008 and there will be no penaltyy as long as you
pay estimates in 2007 each equal to 1/4 of your 2006 tax
(110% if AGI in 2006 is over $150,000 and $75,000 if you are
filing MFS).
ed
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Steve Pope on December 5, 2006, 9:28 pm
Please log in for more thread options >> I am expecting a huge capital gains in a few weeks. If I put
>> it off until after the first would I get to hold onto the
>> taxes for an additional 12 months, or would I be obligated
>> to pay some sort of estimated taxes as soon as I get it? I
>> have already paid estimated taxes based on my 2005 income,
>> but this will be 50X higher.
> If you make the gain in 2006 you can wait to pay the taxes
> on it until April 15, 2007 without any penalty.
No, taxpayer will have to pay the tax by January 15, 2007 to
definitely avoid an underpayment penalty.
Steve
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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