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lgnolan
New Member

I had Capital Gains in April 2021 (from sale of land), resulting in Capital Gains tax of about $11,000. Does the entire $11,000 need to be paid by June 15, 2021?

Where can I find a good Capital Gains Tax calculator, considering that my only other income is Social Security?
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3 Replies

I had Capital Gains in April 2021 (from sale of land), resulting in Capital Gains tax of about $11,000. Does the entire $11,000 need to be paid by June 15, 2021?

no, it doesn't. the options to avoid penalties on underpaying estimated taxes are

withholding (which can be reported as 25% paid each quarter despite what the actual amounts withheld are or you can use the actual withholding for each estimated tax period (3,5,8, and 12 months) +timely estimated tax payments (4/15/21,6/15/21,9/15/21,1/17/2022= either

90% of 2021 tax 

or 100% of 2020 tax (110% if 2020 adjusted gross income more than $150k)

 

if you can use the 2020 100% option and say your 2020 tax was $5,000, $1250, paid in timely each quarter would avoid the 2021 penalty.  this would be true even when filing your 2021 return you find you owe the $11K and pay it by 4/15/2022  

 

I had Capital Gains in April 2021 (from sale of land), resulting in Capital Gains tax of about $11,000. Does the entire $11,000 need to be paid by June 15, 2021?

If the LONG TERM  Cap gains is only $11K and your only other income is SS benefits then you will owe nothing on the 2021 return so an estimate is not required especially if you did not file a 2020 return.  

Hal_Al
Level 15

I had Capital Gains in April 2021 (from sale of land), resulting in Capital Gains tax of about $11,000. Does the entire $11,000 need to be paid by June 15, 2021?

If you owed no tax for 2020, you do not need to prepay tax on your 2021 income.  The rule is: you can avoid the under payment penalty by pre paying (in quarterly installments) the amount of tax from the previous year.  Since you had 0 tax in 2020, you do not need to prepay anything. 

 

I agree with Critter2,  If your long term  Capital gains (LTCG) are only $11K and your only other income is SS benefits then you should owe nothing*.  

 

 To verify, you can use this tool: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1.

 

*LTCG are taxed at 0% until your total income reaches the third income bracket.  Having capital gains can, sometimes, make some of your SS benefits taxable. 

Social security only becomes taxable when added to sufficient other income. 

Social security (including SSDI) becomes taxable when your income, including 1/2 your social security, reaches:

Married Filing Jointly(MFJ): $32,000

Single or head of household: $25,000

Married Filing Separately and lived with your spouse at any time during the tax year: $0

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