Solved: Short Term Capital Gains question
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Level 1

Short Term Capital Gains question

I'd like to ask a question about ST capital gains, here is a hypothetical: suppose in the second quarter I have the unexpected opportunity to sell a stock at a gain, and say I make a $25,000 profit, so there is a ST capital gain. I didn't expect to make this sale, so I didn't set up estimated quarterly payments, so would the correct tax treatment be to file form 2210 and pay the tax on the gain? If not, what would be the correct thing to do? Thanks!

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Accepted Solutions
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Level 14

Short Term Capital Gains question

Yes - pay an estimate of $25,000 times your tax bracket as that is what would be owed on your tax return in any event

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Employee Tax Expert

Short Term Capital Gains question

Most taxpayers can avoid the penalty by ensuring they have paid taxes equal to 100% of the prior year tax liability.  This can be via withholding or estimates.  If your AGI is over $150,000, you must pay 110% of the prior year tax liability in order to avoid a penalty.

 

If you have W-2 income, just be sure you withhold an amount equal to or more than your 2018 tax liability (or 110% of it if AGI is over $150,000). 

 

 

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4 Replies
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Level 14

Short Term Capital Gains question

use form 1040-ES

Submit an estimated payment of $25000* your tax bracket by June 17, 2019
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Level 1

Short Term Capital Gains question

Thank you for the reply, but please clarify- did you mean for me to pay taxes on the $25,000 for my tax bracket?

Highlighted
Level 14

Short Term Capital Gains question

Yes - pay an estimate of $25,000 times your tax bracket as that is what would be owed on your tax return in any event

View solution in original post

Highlighted
Employee Tax Expert

Short Term Capital Gains question

Most taxpayers can avoid the penalty by ensuring they have paid taxes equal to 100% of the prior year tax liability.  This can be via withholding or estimates.  If your AGI is over $150,000, you must pay 110% of the prior year tax liability in order to avoid a penalty.

 

If you have W-2 income, just be sure you withhold an amount equal to or more than your 2018 tax liability (or 110% of it if AGI is over $150,000). 

 

 

View solution in original post

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