Thank you for the help. The 2019 Married Joint AGI was more than $150,000 and withholding was 109%. It looks like I almost made it with exception 2, but I do need to send in more in estimated taxes or pay penalties.
I certainly will not owe $1,000,000 in taxes. However, taking the 2019 Married Joint AGI, adding the 2020 short term capital gain that drove my initial question, then assuming the standard deduction, it looks like I will reach into the 32% marginal rate for the 2020 joint return.
I am also giving this some thought. I also have a long term equity (energy index mutual fund) position that is currently an unrealized loss, and I could sell that position to offset some of the 2020 short term gain. Here I am mixing a short term gain and a long term loss, but the two items would be large enough (compared to my other long and short term gains) so that some offset would be realized. The energy segment has been down for years but there could be a turnaround in the next year or less. How big does that indefinite turnaround need to be before that lost opportunity exceeds the value of the more predictable tax savings? If I sell the index and buy some of its top ten holdings, I think I would avoid a wash sale, but if I sell those holdings within 12 months then I am again facing short term gains.
