Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: edcosoft 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 121114  
Subject: Re: Estimated tax timing for capital gains Date: 3/29/2000 6:21 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
My wife and I recently retired and, except for about $10,000 in Social Security, all of our
income for the year 2000 will be derived from long-term capital gains. If all of those gains
are realized during the first and second quarters, can I legally make our estimated tax
payments in four equal quarterly payments or must I make them in quarters one and two and
then make none for quarters three and four.

Also, is there any way to avoid completing a form 2210 in this case.


Yes. You are referring to the Short Method of figuring the penalty at the bottom of the first page of Form 2210. The 4 equal payments must also be on time to use this shortcut. If no penalty is computed because you paid enough, per Line 17 you do not have to file the Form 2210. If you miscalculate and underpay, figure the penalty on the Short Method and that's all you have to do. Do not complete the Regular Method nor AI.

For your particular circumstances this is a good deal, howwever, I doubt if you can estimate the year's tax close enough by the due date of the first installment. The penalty is only 8% simple interest, however, and if you have a big gain later you can increase an installment to stop the penalty but you'll have to complete the Regular Method, or Schedule AI. Our 2210 calculator on www.edcosoft.com might be handy for you if your gains are larger than anticipated. Ed
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Macro Economics

2.1: The Labor Pool Problem
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement