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#5
10-25-2003, 09:34 PM
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 Re: Underpayment Penalty A.G. Kalman" <agk202[at]netscape.net> wrote: - quote - > ftydvr[at]juno.com (sftydvr) wrote:
I should have added that this (no 2210) assumed that the> > What is the proper method of avoiding an under payment of > > taxes penalty for a situation where the sale of a large > > asset occurred in the last part of the year and it created a > > large capital gain? This is for a client, which normally > > covers the obligations through salary withholding in > > paychecks. Should a Form 2210 be filed? Should one request > > a wavier (1a)? Should one mark use the annualized income > > installment method (1b)? Will the IRS recognize the late in > > year unplanned sale of an asset an unusual circumstance? > It's quite possible that a safe harbor exists for this > client. If the amount of withholding is at least equal to > 2002 taxes then no estimated tax payment is required. > Assuming no safe harbor, just send the 4Q estimated tax > payment by 1/15/04. I've never used the 2210 when the > trigger was a 4Q capital gain identified on the Schedule D > and the 4Q payment was timely made. other income for the year had adequate withholding. Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
10-24-2003, 07:08 AM
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| Re: Underpayment Penalty sftydvr <sftydvr[at]juno.com> wrote: - quote - > What is the proper method of avoiding an under payment of
I'm not a tax professional nor an attorney, but I would> taxes penalty for a situation where the sale of a large > asset occurred in the last part of the year and it created a > large capital gain? This is for a client, which normally > covers the obligations through salary withholding in > paychecks. Should a Form 2210 be filed? Should one request > a wavier (1a)? Should one mark use the annualized income > installment method (1b)? Will the IRS recognize the late in > year unplanned sale of an asset an unusual circumstance? think that if you realize a large capital gain in the last part of the year, you should file 1040-ES on January 15 of the following year. There should be no penalty, because your estimated taxes in each quarter are approximately what you need to make your taxes come out right for the year, based on your income through the end of that quarter. (I should probably make that "quarter", because est. taxes are due April 15, June 15, Sept. 15, and Jan. 15, which are spaced 2-3-3-4 months apart.) You could do the whole calculation to estimate how much tax is due, or you could just figure that your witholding takes care of your other taxes, and pay 20% of your capital gain as estimated taxes. -- I pledge allegiance to the Constitution of the United States of America, and to the republic which it established, one nation from many peoples, promising liberty and justice for all. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
10-24-2003, 06:49 AM
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| Re: Underpayment Penalty sftydvr[at]juno.com (sftydvr) wrote: - quote - > What is the proper method of avoiding an under payment of
File the 2210, with the 2210AI annualized attachment. This> taxes penalty for a situation where the sale of a large > asset occurred in the last part of the year and it created a > large capital gain? This is for a client, which normally > covers the obligations through salary withholding in > paychecks. Should a Form 2210 be filed? Should one request > a wavier (1a)? Should one mark use the annualized income > installment method (1b)? Will the IRS recognize the late in > year unplanned sale of an asset an unusual circumstance? is not an easy form to fill out, so read the instructions carefully. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
10-24-2003, 06:11 AM
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| Re: Underpayment Penalty ftydvr[at]juno.com (sftydvr) wrote: - quote - > What is the proper method of avoiding an under payment of
It's quite possible that a safe harbor exists for this> taxes penalty for a situation where the sale of a large > asset occurred in the last part of the year and it created a > large capital gain? This is for a client, which normally > covers the obligations through salary withholding in > paychecks. Should a Form 2210 be filed? Should one request > a wavier (1a)? Should one mark use the annualized income > installment method (1b)? Will the IRS recognize the late in > year unplanned sale of an asset an unusual circumstance? client. If the amount of withholding is at least equal to 2002 taxes then no estimated tax payment is required. Assuming no safe harbor, just send the 4Q estimated tax payment by 1/15/04. I've never used the 2210 when the trigger was a 4Q capital gain identified on the Schedule D and the 4Q payment was timely made. Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
10-24-2003, 06:11 AM
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| Re: Underpayment Penalty sftydvr <sftydvr[at]juno.com> wrote: - quote - > What is the proper method of avoiding an under payment of
File Form 2210 Schedule AI with your tax return, and if you> taxes penalty for a situation where the sale of a large > asset occurred in the last part of the year and it created a > large capital gain? This is for a client, which normally > covers the obligations through salary withholding in > paychecks. Should a Form 2210 be filed? Should one request > a wavier (1a)? Should one mark use the annualized income > installment method (1b)? Will the IRS recognize the late in > year unplanned sale of an asset an unusual circumstance? need to pay estimated tax, pay that tax on time using Form 1040ES. Form 2210 Sch AI can be nasty, but there's certainly software out there that will ease the pain. Or seek local professional assistance. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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10-24-2003, 06:11 AM
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| Re: Underpayment Penalty sftydvr[at]juno.com (sftydvr) writes: - quote - > What is the proper method of avoiding an under payment of
Annualized income. The 2210 is required.> taxes penalty for a situation where the sale of a large > asset occurred in the last part of the year and it created a > large capital gain? This is for a client, which normally > covers the obligations through salary withholding in > paychecks. Should a Form 2210 be filed? Should one request > a wavier (1a)? Should one mark use the annualized income > installment method (1b)? Phil Marti Topeka, KS << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
10-22-2003, 11:20 AM
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| Underpayment Penalty What is the proper method of avoiding an under payment of taxes penalty for a situation where the sale of a large asset occurred in the last part of the year and it created a large capital gain? This is for a client, which normally covers the obligations through salary withholding in paychecks. Should a Form 2210 be filed? Should one request a wavier (1a)? Should one mark use the annualized income installment method (1b)? Will the IRS recognize the late in year unplanned sale of an asset an unusual circumstance? Thanks, BC << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| penalty, underpayment |
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