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donnalattanze
New Member

IRS reviewed 2018 taxes. Sale of stock was left off. What additional taxes do I owe? sale of stock was $23,529. Cost Basis was $8976. Capital gains was $14,552.76

They said to estimate taxes owed because interest is accruing
3 Replies
Critter-3
Level 15

IRS reviewed 2018 taxes. Sale of stock was left off. What additional taxes do I owe? sale of stock was $23,529. Cost Basis was $8976. Capital gains was $14,552.76

If the IRS doesn't have the cost basis on the notice then amend the return to add the missing information and review the 1040X to see how that changes things.

 

 

Hal_Al
Level 15

IRS reviewed 2018 taxes. Sale of stock was left off. What additional taxes do I owe? sale of stock was $23,529. Cost Basis was $8976. Capital gains was $14,552.76

What additional taxes do I owe?

 

That depends on your total income and whether your $14,553 gain is long term or short term.  Long term capital gains (LTCG) are taxed at 0% until your taxable income reaches the 22% tax bracket.  The portion of the LTCG in the higher bracket is taxed at 15%.

 

As others have suggested, you need to prepare an amended tax return.

 

For a quick look, you can try this tool: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1. Enter your regular income first to see the regular tax. Then add the sale to see the effect.

Enter the $14,553 as LTCG.  Depending on how much total income you have LTCG are partially taxed at 0%, 15%, 20% and/or 23.8%. 

Opus 17
Level 15

IRS reviewed 2018 taxes. Sale of stock was left off. What additional taxes do I owe? sale of stock was $23,529. Cost Basis was $8976. Capital gains was $14,552.76

The current interest rate on the late payments is about 3% APR, so don’t let that frighten you into acting in a rush and making a mistake or overpaying.

 

Usually, the IRS will send a letter that proposes a tax amount that you owe. If you agree with this amount, reply to the letter and send a check.  However, the tax amount is sometimes incorrect, especially in a case like this where the IRS does not know your cost basis.  You should prepare an amended 2018 tax return, add the sale of stock and all the associated information, and calculate the amount of tax you owe. If it is the same as the IRS bill, just mail a check in the IRS will adjust your tax return in their file. If you have calculated a different amount, then mail a check for the new amount, plus a copy of your amended tax return and a letter of explanation, to the address of the office that sent you the notification.  

Don’t be afraid of the interest, but do pay attention to any deadlines in the notification letter. If you miss those deadlines, then the proposed tax amount becomes final and you can’t appeal it by performing the calculation.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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