Should I pay an estimate tax to California if I sold my rental property with a 3.3% tax withholding?

[yjwang0404]

The house was sold in May 2018. I calculate my long term capital gain tax for California is about $100k (at California effective tax rate 10.47%). There is a 3.3% CA withholding that I paid (withholding $61k) when the house was sold. Do I still need to pay the difference as estimate tax (i.e. $100k - $61k) to avoid underpayment penalty? The initial value of the house is about $720k and the sale value is about $1.85M. I own the house for more than 5 years but never live there.

My regular yearly income is about between $150k to $200k.

[CalCountry]

Four things to consider:

1) California taxes capital gain as ordinary income, and there is no special treatment of capital gain.
2) Your "effective" California tax rate may be affected by the inclusion of the gain into your income.  That would mean your total California tax liability might increase beyond your stated 10.47% effective rate.
3) Because the property was not your principal residence, your gain on the sale does not benefit from the federal & California capital gain exemptions of $250K single / $500K joint.
4) Your required estimated tax payments will be based on your total tax liability, not separately on the individual real estate sale.  Whether you need to make additional estimated tax payments beyond the 3.33% already withheld on your real estate sale will be based on calculating your total California income tax liability on your total taxable income after including the capital gain in your income.  Whether your total California income tax withheld is sufficient to avoid an underpayment penalty will be based on all the amount(s) you have had withheld or paid as estimated tax when compared to your total tax liability.