When to pay tax on second home sale

[halds]

Wife and I sold a second home in August 2017. I anticipate having to pay long term capital gains on the profit. Do I need to submit an estimated quarterly payment now or wait until the time of filing in April 2018? We have not received a 1099-S yet from the the closing firm.

[TomD8]

Payment of estimated taxes is optional.  This IRS reference explains the situations when a penalty for underpayment might apply: https://www.irs.gov/taxtopics/tc306

Remember that if the second home wasn't located in your home state, you might have to file a non-resident tax return in the state where it was located.

[halds]

it still is not clear if we need to pay estimated tax now or at time of filing in April

[TomD8]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/faqs/estimated-tax/individuals/individuals-2">https://www.irs.gov/faqs/estimated...>

[halds]

You are not understanding my question, that link does not help. I know HOW to file estmated tax. I need to know whether I am required to submit estimated tax on the sale of a second home in August 2017. I have not gotten a 1099-s form yet for the sale. Should I have gotten it or does it come after Jan 15th? Do I need to pay an estimated tax without having the 1099-S form yet? the IRS publications are very confusing.

[halds]

from IRS 505 it seems that if I make my W4 withholdings for 2017 year to be greater than 110% of my tax paid in 2016 (AGI > $150,000) , I should not have to pay tax on the sale until I file and avoid tax penalty. Is that correct?

[SweetieJean]

Which state?

[halds]

Nebraska no out of state tax complications

[TomD8]

"Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and timely estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% (110% if your AGI for the previous year was more than $150,000) of the tax shown on the return for the prior year, whichever is smaller."   You can find additional detail on page 52 of this IRS reference: <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p505.pdf">https://www.irs.gov/pub/irs-pdf/p505.pdf</a>

[TomD8]

The closing agent for your home sale is responsible for the 1099-S.  The deadline for them to file it with the IRS is February 28, 2018.  You'd have to contact them (or the attorney who handled your closing) as to when you'll be receiving your copy.

[halds]

Thanks I understand what is quoted. I am looking for what is an exception to 'generally'  that may apply to sale of second home or long term capital gain

[TomD8]

I think the exceptions to "generally" refer to the various situations described on pages 52-53 of Pub. 505 - such as high-income taxpayers, farmers and fishermen, timely estimated payments, etc.  There is no rule specific to sale of a second home or LT capital gain.