How to figure & pay 2018 estimated long term capital gain taxes. Can I just do $gain x 12% and pay that amount?

I'm not sure where you came up with that 12% figure.  It's not one of the "statutory" long term capital gains rates and if the capital gains are short term then the rates are a lot higher.

You should understand, too, that it's not necessary to pay ALL the tax associated with that January capital gain with the first installment; you can legally and correctly spread that out over the 4 quarterly payments.  (Indeed, you may not really have to pay estimated taxes at all, depending on your situation, but that's another conversation.)

I'd recommend that you open up your income tax return and start the "Form W-4 and estimated taxes" interview.  In that interview you can put in your best guesses at to what your 2018 income tax return might look like.  (TurboTax will show the 2017 figures to help you along.)  You can be conservative if you want to, shading up your income, shading down your deductions.  TurboTax will come up with some options as to the amount of estimated taxes you could pay and will print out the Forms 1040ES's that you need.

Tom Young

Thanks Tom for your quick reply.  I bought these share 10 years ago to the capital gain is 1000% long term and long term capital gain is 12% correct me if I am wrong.

The large gain is more than my 2017 Adjusted Gross Income (1040 line 37) so I want to pay this long term capital gain now and separately from my 2018 Income tax to keep things simple for me and avoid underpayment penalty.  Is that legal/correct?

Thanks again!

"long term capital gain is 12% correct me if I am wrong."

You are wrong.  The "statutory" rates are 0%, 15% and 20% though given our screwed up income tax return system you might find that your actual marginal rates are significantly higher.

"The large gain is more than my 2017 Adjusted Gross Income (1040 line 37) so I want to pay this long term capital gain now and separately from my 2018 Income tax to keep things simple for me and avoid underpayment penalty.  Is that legal/correct?"

The IRS will happily accept as much money as you care to shower on it and credit it to your account.

I see no large "simplification" factor in play here.  You're simply making an estimated payment of some amount that you're calculating on the back of an envelope.  I guarantee it won't be the "correct" amount - that's impossible, literally - and by paying it all upfront you've simply made an interest free loan to the government.  

You can legally pay that amount in four installments and if you work through the interview I mentioned and select one of the "safe harbor" amounts you won't be charged an underpayment penalty, even if you owe a ton of money to the IRS when you send in your income tax return.

But of course you are free to do what you want here.

Thanks very much again Tom.

I now understand what you suggested earlier "Form W-4 and estimate taxes" as this is the only way to come up with a best guess estimate of my 2018 income to pay taxes using the best guess tax rate and not just 12%.

I went through the TT questions and got the 2018 estimated tax vouchers with 4 equal amount to pay.

Once again, I really appreciate your help and the info.