I sold a piece of property in November, 2020. How do I figure the capital gains tax and do I need to mail the payment in now in order to avoid a penalty?

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Kat11_2

Alumni - Champ

How long have you owned this property? Capital gains tax rates are different for short-term (one year or less) vs. long-term (greater than one year) gains.

As for making payment of your taxes due, you can go ahead and make payment now, or you can wait until fourth quarter estimated tax payments are due...January 15, 2021.

*** I am NOT a tax expert. I am a seasoned TurboTax user, and volunteer to provide assistance to TT users. Nothing I post is to be considered TAX ADVICE; I bear no legal liability for responses.***

gettaandsteveAuthor

Level 2

We have owned the property for 38 years.

Kat11_2

Alumni - Champ

@gettaandsteve So your capital gains would be taxed at the long-term rate. You'd be safe to send in 20% of your profits (sale price less original investment plus improvements) by January 15, 2021. You can make payment by check or by using the payment options on the IRS website. I'm linking that below. NOTE: I don't recommend paying by credit card because of significant "convenience fees".

Payments | Internal Revenue Service (irs.gov)

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*** I am NOT a tax expert. I am a seasoned TurboTax user, and volunteer to provide assistance to TT users. Nothing I post is to be considered TAX ADVICE; I bear no legal liability for responses.***