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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19023  
Subject: Another Estimated Tax Q Date: 8/22/2000 6:48 PM
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Since the subject has been brought up, how does one deal with investment income that is not predictable? You can estimate IRA withdrawals, pension and social security very accurately. You can estimate interest income and regular dividends fairly accurately. But capital gains are at the mercy of the market. You cannot estimate what capital gain distributions will be from mutual funds. You also cannot estimate what capital gains (or losses) you will take during the year since this will depend on market conditions.

I tried the IRS method for dealing with irregular income one year. Took profits on a stock position early in the year and paid the estimate tax based on their forms. Late in the year I decided to take a capital loss. The result was that I'd overpaid bigtime and had a large refund coming. That's not all bad but I'd rather owe them than have them owe me, providing I can avoid penalties.
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