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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 might be handy for you if your gains are larger than anticipated. Ed
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