It depends if you need to pay estimated taxes on the details below. Keep in mind the estimated tax payment would be after any withholdings already being paid for you from wages, or other income where federal tax is withheld, etc.
The gain using your example is two fold:
- Total Gain: $53,000 (sales price less cost)
- Depreciation Recapture: $53,000 (it is recaptured to the extent of gain on the sale)
- Tax rate is capital gains on this however it is maximum at 25% (considered Section 1250 property under tax law).
If we assumed that all of your income is subject to tax rate schedules except the gain on the sale of your rental property your tax would be estimated at $45,000 plus the $13,250 (gain on the sale) = $58,250. You can use the worksheet included in the 1040-ES instructions below with your actual figures to arrive at closer number. I did not use the standard or itemized deductions which will come into play as well as any credits you might have. I also assumed the total income included the gain on the sale
Details to Avoid Underpayment Penalties:
Generally, you can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:
- 90% of the total tax after credits for the current year, or
- 100% of the total tax after credits in the prior year
- See one exception below.
You can also avoid the penalty if the amount you owe is less than $1,000 as long as any estimated tax payments you made are timely.
Note: High-income taxpayers. If your adjusted gross income (line 11 of your 2024 Form 1040) is greater than $150,000 (or $75,000 if you're married and file a separate return from your spouse), you can avoid a penalty by paying at least 110% of your total tax from the prior year.
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