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Last year (1999) my wife and I had an AGI that was substantially over our normal combined incomes due to liquidating a large mutual fund. I understand that there isn't any penalty since our withholding for 1999 was sufficient to cover our 1998 taxes, so the large 1999 tax due to capital gains doesn't count this year (safe harbor) .
In 2000 we will be recipients of a large annuity due to the death of my wifes father, which we intend to take as a lump sum distribution (our combined income is sufficiently large that there is minimal advantage to taking a five year payout). This distribution will cause our 2000 AGI to be about the same as for 1999, so our normal withholding will not cover the taxes due for 2000. Do we have to pay estimated taxes in 2000? Since the reason for the spike in our income is different for the two years, are they treated as unrelated events?
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