Your guess is correct. The IRS doesn't care what you did with the money from the brokerage account. The gain on the sales in the account is income and has to be reported.
The possibility that you might be able to exclude the gain from selling your home has no effect on the income from the brokerage account.
Note:
(1) Since your wife inherited the account, her basis for each investment in the account is the market value on the date of her mother's death.
(2) Sales of inherited assets are always treated as long term, regardless of how long your wife actually held them, or how long her mother held them before she passed.
Whether you need to make an estimated tax payment depends on your total income and total tax, not any one specific transaction. It depends on the amounts and types of your other income, how much tax you have withheld during the year, and other factors. There are several ways that you can do an approximation of your 2019 tax to see where you stand.
- Use the 2019 estimated tax section in 2018 TurboTax.
- If you have the CD/Download TurboTax software for 2018, use the What-If Worksheet.
- Use TaxCaster. (This is still set up for 2018, but it will be close enough).
