I will be selling some mutual funds in May to put toward a house we are building. These are non-qualified funds, so I have to get a handle on ES payment for June?

[cksedona]

2017 AGI was $20200, with a refund. I expect $9000 in gross proceeds. 2018 income will be the same, or less.

[CarolC · Accepted solution]

You are smart to plan for the additional taxes as a result of your future mutual fund sales.  If you held your mutual fund positions for one year or more, based on the information you provided, you will receive the 0% capital gains rate.  This means none of your $9,000 will be taxed.

However, if you held your mutual fund investments for less than one year, you will pay 15% tax on the gain portion of the $9,000 proceeds.  You can request the mutual fund company withhold 15% from the sale.  By doing this, you do not need to mail in additional funds for your estimated payment.  Either way will work.

I usually play it safe.  I will request tax withholding even if I don't expect to pay much in tax.  This covers my withholding requirement just in case I receive unexpected funds or earn additional income later in the tax year.  When you have too much withholding, it is returned to you via your tax refund when you file your tax return.

See the TurboTax FAQ below for more information on capital gains.  Click "See entire answer" for the full page view.

https://ttlc.intuit.com/replies/4791540