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Frequently Asked Tax Questions

Estimated Tax - Large Gains, Lump-sum Distributions, etc.

  1. If I anticipate a sizable capital gain on the sale of an investment during the year, do I need to make a quarterly estimated tax payment during the tax year?

Rev. date: 1/1/2011

If I anticipate a sizable capital gain on the sale of an investment during the year, do I need to make a quarterly estimated tax payment during the tax year?

You must pay estimated tax for the current tax year if both of the following apply: 
*NOTE:  Certain taxpayers with higher adjusted gross income must substitute 110% for 100%. Also, certain qualified small business taxpayers may substitute 90% for 100% for any tax period beginning in 2009.
If you are making estimated tax payments you can:
You may be able to annualize your income and:
NOTE:  Publication 505, Tax Withholding and Estimated Tax, has a Qualified Dividend and Capital Gains Worksheet to help estimate the additional tax liability.