How to pay estimated tax for unpredictable stock sales

[lasr]

It's my first year to rely on cash savings and stock sales for income. Now I plan to sell some stock, which would generated large long term gains. Because my stock broker does not do withholding for those sales, how can avoid under-withholding penalties? To my understanding, the estimated tax for should be four even payments. Is it unavoidable that an unplanned large capital gain close to the end of year will cause penalty? How is the penalty calculated? I am in CA. Are the Fed and CA estimate tax rules and penalty calculation similar? 

 

[lasr]

An followup question, does it help if I pay IRS some money now, for the estimated tax of previous quarters? Do I need to specify which estimated tax period(s) the payment for? My thinking is if I have to pay penalties the earlier I pay the less the penalty would be.

[Bsch4477]

The penalty for under withholding tax on a quarterly basis is avoided by completing form 2210 where you can report quarterly income. So pay withholding as you receive the income. 

[lasr]

That sounds a relief for my year-end stock sale. My actual case is a bit more complicated. I had a long term gain in May this year, to which I didn't pay the estimated tax yet. Again, it's my first year of mainly relying on investments. I always had enough w-4 withholding for the previous years. I didn't realize the situation until now. How can I reduce the penalty to the minimum if it is not avoidable? 

[Bsch4477]

Pay estimated tax now in an account that would cover the May sale tax liability. 

[lasr]

On the form 2210 do I need to figure out every single the income and deductible for each quarter, such as salary, stock sales, dividends, mortgage interest, property tax, withholding for w2? Can some of them be spread **evenly** for the 4 quarters? If so what are the rules to choose between spreading evenly and filing to the quarter of the event occurrence? Thanks.

[Bsch4477]

Your W-2 tax withholding and any tax withheld from a retirement account are treated as paid quarterly.