My combined federal and state tax due is about $5k right now, because my parents withheld important information from me.
This is my second year out of college, so my income isn't very high. I do, however, have a decent understanding of the tax rules due to my accounting and tax background, so I have everything planned. My tax withholding was planned carefully based on my projected income from my job and investments. I have my own brokerage and retirement account that I manage on my own, but my dad also opened a brokerage account for me when I was little that he manages. To this day, he has not given me access to this for whatever reason; thus, I have good visibility over my finances from my job and my own brokerage account, but not my brokerage that is managed by my dad.
Everything was fine as I was filing my taxes for this year until my dad sent me the 1099-DIV and 1099-B from the account he manages. I was shocked when I saw a 25k long term capital gain. Again, I asked him throughout the year whether he made any trades and he said no. I did plan for the small exchanges that he would make here and there just in case, but I didn't plan for a significant 25k capital gain - which represents a significant percentage of my income from my job. This has caused my tax return to go from a refund to a significant tax due of around 5.5k, which will definitely be hit with a penalty from the IRS. Is there any way I can get this waived considering my situation? Again, I asked him throughout the year whether there were any gains that I should be aware of so that I can take the appropriate action. He wouldn't give me access to the account either, so I was really tied to him giving me the right information. The worst thing is that he's asking me to pay for the tax out of my own pocket. That may sound reasonable, but he never gave me access to those gains so essentially I am footing a tax bill for a person that made a lot more money than I actually did, but didn't actually have access to those funds. That, however, is an issue I have to work out with my dad, but the concern here is the penalty.
Thanks!
