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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2310
Experience:  IRS licensed Enrolled Agent and tax instructor
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This June I received a "windfall" six-figure capital gain when

Customer Question

This June I received a "windfall" six-figure capital gain when one of the companies in my stock portfolio was acquired. My original schedule of estimated IRA tax payments did not anticipate such a gain.
In order to avoid a penalty, how should I modify my estimated tax payment? That is, how much and when? I assume I will be paying the 20% cap gains rate plus the 3.X % surcharge.
(Some published sources say that if my estimated tax payments are at least 110% of the previous year, I would be in a "safe zone". Would this apply to my situation?)
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you.
To avoid the underpayment penalty - the safe zone - you have to pay smaller of 90% of your current year taxable liability or 100% (110% if your income is 150K+) of your prior year taxable liability by the end of the year or with the last quarter estimate which is due January 15. So if you look at your 2014 tax return, as long as you pay 110% of line 63 by the end of this year or as the last estimated payment, you will be fine.
http://www.nolo.com/legal-encyclopedia/estimated-tax-penalities-how-avoid-underpaying.html
Let me know if you have any questions.
Expert:  emc011075 replied 1 year ago.
I see you read my respond but didn't get any feedback. Do you have any questions? Is there anything else I can help you with today?
And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.