topic Spreading out tax payment on capital gains and 401K distributions? in Get your taxes done using TurboTax

Spreading out tax payment on capital gains and 401K distributions?

PaPaJ65 — Mon, 09 Mar 2026 09:00:10 GMT

I took nearly $200k out of my IRAs and 401Ks last year due to my wife having terminal brain cancer. She passed away in November. I also sold our rental property (for a little over $300K capital gain) to pay off the mortgage on our current home. I'm retired with no debts.... should be great, right? Not so much. I completed my tax calculations using Turbo Tax and it shows that I owe over $70K in federal taxes and $25K in state taxes. I don't make nearly that much in a year on retirement. How can I spread that out or delay payment? Worst case is using a home equity loan or drawing even more from my 401Ks.

Re: Spreading out tax payment on capital gains and 401K distributions?

DanP0428 — Sun, 06 Mar 2022 03:11:40 GMT

I am so sorry for your loss.

I would suggest you go through your return with a TurboTax Live expert or with a local tax preparer. They may find deductions that you missed.

You can set up an installment plan with the IRS. Hopefully a professional can help you reduce the amount that you owe.

If you owe $50,000 or less, the IRS will allow an installment agreement for up to 72 months.

If you owe more than $50,000, you must negotiate with the IRS. Do have a professional look at your return before you make any payment plan.
There may be some relief for you state taxes also. Each state has its own rules about payment.

Re: Spreading out tax payment on capital gains and 401K distributions?

fanfare — Sun, 06 Mar 2022 04:19:15 GMT

you paid off your mortgage too early.

The IRS comes first.

Re: Spreading out tax payment on capital gains and 401K distributions?

fanfare — Sun, 06 Mar 2022 04:26:14 GMT

If you apply for Home Equity, do not tell the bank officer the purpose for which you are applying for credit.

Re: Spreading out tax payment on capital gains and 401K distributions?

fanfare — Sun, 06 Mar 2022 04:29:13 GMT

Consider a fixed rate loan.

Interest rates are going to go way up soon.

Re: Spreading out tax payment on capital gains and 401K distributions?

PaPaJ65 — Mon, 07 Mar 2022 01:48:39 GMT

Not helpful. I asked for help not criticism of what has been done and can't be changed.

Re: Spreading out tax payment on capital gains and 401K distributions?

fanfare — Mon, 07 Mar 2022 03:11:10 GMT

You proposed two options

"using a home equity loan or drawing even more from my 401Ks. "

In my opinion, the loan route is the one to choose.