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Sold rental home 2019, I think I need to pay gains within the quarter it was sold. I have carry forward losses from 2018, Can I send the IRS a calculated difference?

 
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3 Replies

Sold rental home 2019, I think I need to pay gains within the quarter it was sold. I have carry forward losses from 2018, Can I send the IRS a calculated difference?

Yes, you can. However, you can avoid a penalty for underpayment of estimated tax if you either owe less than $1,000 in tax after subtracting your withholding and refundable credits, or if you paid withholding and estimated tax of at least 90% of the tax for the current year (2019) or 100% of the tax shown on your return for the prior year 2018), whichever is smaller

 

See https://www.irs.gov/taxtopics/tc306

Sold rental home 2019, I think I need to pay gains within the quarter it was sold. I have carry forward losses from 2018, Can I send the IRS a calculated difference?

"I think I need to pay gains within the quarter it was sold."

 

No, you don't.  In fact you may not need to pay anything at all until you submit your income tax return next April.  But if you determine that you do need to pay estimated taxes to the IRS then you certainly can do that in equal quarterly amounts. 

Carl
Level 15

Sold rental home 2019, I think I need to pay gains within the quarter it was sold. I have carry forward losses from 2018, Can I send the IRS a calculated difference?

To give you a *ROUGH* estimate, your taxable gain is figured as follows:

 - What you paid for the property plus;

 - The cost of any property improvements you paid for while you owned the property, minus;

 - The total amount of depreciation taken on the property while you owned it, minus;

 - Your other carryover losses.

Typically your carryover losses already include depreciation.

Subtract the above total from your sales price and that's your taxable gain. If you send the IRS at least 20% of that gain then you'll be fine come tax filing time, assuming tax withholding on any other income you receive is sufficient of course.

Finally, if your state taxes personal income you may need to pay a quarterly tax estimate to your state also.

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