Spreading out tax payment on capital gains and 401K distributions?

[PaPaJ65]

I took nearly $200k out of my IRAs and 401Ks last year due to my wife having terminal brain cancer. She passed away in November. I also sold our rental property (for a little over $300K capital gain) to pay off the mortgage on our current home. I'm retired with no debts.... should be great, right? Not so much. I completed my tax calculations using Turbo Tax and it shows that I owe over $70K in federal taxes and $25K in state taxes. I don't make nearly that much in a year on retirement. How can I spread that out or delay payment? Worst case is using a home equity loan or drawing even more from my 401Ks.   

[DanP0428 · Accepted solution]

 I am so sorry for your loss.  

I would suggest you go through your return with a TurboTax Live expert or with a local tax preparer.  They may find deductions that you missed.

You can set up an installment plan with the IRS.  Hopefully a professional can help you reduce the amount that you owe.

If you owe $50,000 or less, the IRS will allow an installment agreement for up to 72 months.

If you owe more than $50,000, you must negotiate with the IRS.  Do have a professional look at your return before you make any payment plan.  
There may be some relief for you state taxes also.  Each state has its own rules about payment.

[fanfare]

you paid off your mortgage too early.

The IRS comes first.

[fanfare]

If you apply for Home Equity, do not tell the bank officer the purpose for which you are applying for credit.

[fanfare]

Consider a fixed rate loan.

Interest rates are going to go way up soon.

[PaPaJ65]

Not helpful. I asked for help not criticism of what has been done and can't be changed. 

[fanfare]

You proposed two options

"using a home equity loan or drawing even more from my 401Ks.   "

 In my opinion, the loan route is the one to choose.