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Level 1

When do I pay capital gains on 2018 sale of rental property?

I will be closing on a rental property in May 2018. I lived in the house for 17 years, then converted it into a rental for 7 years (beginning in 2011). I will realize an overall profit. My question is this: Do I have the rest of the year to figure out my cost basis, before I pay capital gain tax? Or, do I have to pay capital gain tax in May 2018?
7 Replies
Employee Tax Expert

When do I pay capital gains on 2018 sale of rental property?

You will pay the capital gain with your regular return so you do not have to pay it in May- however, if you will have cap gain tax due when you file in 2019 make sure that you send estimated payments to IRS if required and check your state to see if they have any reporting due when you sell.

Level 1

When do I pay capital gains on 2018 sale of rental property?

Where do I research estimated payments to IRS?  I'd like to find out when I need to start making estimated payments; that is, am I required to make estimated payments before April 15, 2019?
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Employee Tax Expert

When do I pay capital gains on 2018 sale of rental property?

You can use the TaxCaster - Free Tax Calculator | Estimate Your Tax Refund | TurboTax®  (<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/calculators/taxcaster/">https://turbotax.intuit.com/tax-tools/...>) It is updated for the 2018 tax changes and you can get a pretty accurate amount.
Level 1

When do I pay capital gains on 2018 sale of rental property?

I don't find the link to the taxcaster helpful in answering the question. Please explain what estimated payments are and why I might need to make them?
Level 20

When do I pay capital gains on 2018 sale of rental property?

Level 11

When do I pay capital gains on 2018 sale of rental property?

You might need to send in Estimates so you don’t owe too much on your tax return.  If you owe too much you might owe interest and penalties for not paying in during the year.  

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
 
- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).
Level 20

When do I pay capital gains on 2018 sale of rental property?

110% for higher incomes.
State requirements may be different.