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Author: tednvon Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: capital gains and when to pay Date: 6/1/2000 4:58 PM
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This may be a simple question, but not sure of the answer. I just sold some real estate and want to invest money for retirement. I owe some capital gains. Do I need to pay the tax now or can I put this money to work earning interest and then pay the capital gains tax next April 15. If I pay now I obviously loose the possible interest over the next 10 months on 20 % of the money...thanks for the help...Ted
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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22306 of 76418
Subject: Re: capital gains and when to pay Date: 6/1/2000 5:26 PM
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tednvon wrote:
I just sold some real estate and want to invest money for retirement. I owe some capital gains. Do I need to pay the tax now or can I put this money to work earning interest and then pay the capital gains tax next April 15

The tax system is designed to be a 'pay-as-you-go' system. That is to say that you are supposed to pay taxes as you receive income (or capital gains) during the year. This is why taxes are required to be withheld from your regular paycheck. Most people who receive income from investments have to pay quarterly estimated taxes for this reason.

If next Apr 15, you end up owing more than a certain percentage (10%, I think) of your total tax bill, then you will have to add a penalty to your tax bill.

-rkm

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22308 of 76418
Subject: Re: capital gains and when to pay Date: 6/1/2000 6:18 PM
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http://www.irs.gov/ind_info/tax_trails/fig5-b.html

may be helpful for figuring out whether you have to pay estimated tax or not. [you probably do, unless you increase your witholding from your paycheck]

Also see

http://www.irs.gov/forms_pubs/pubs/p170502.htm

For more information, check the Tax Strategies board.

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Author: 1Vagabond One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22325 of 76418
Subject: Re: capital gains and when to pay Date: 6/2/2000 12:30 PM
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rkm writes ---
If next Apr 15, you end up owing more than a certain percentage (10%, I think) of your total tax bill, then you will have to add a penalty to your tax bill.


Isn't this only true if your 2000 contributions don't meet 100% or 108% of your 1999 tax bill?



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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22346 of 76418
Subject: Re: capital gains and when to pay Date: 6/3/2000 10:07 AM
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Isn't this only true if your 2000 contributions don't meet 100% or 108% of your 1999 tax bill?

Yes, you are right.

-rkm

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