| Tax after sale of rental property |
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tnrbriz
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| Tax after sale of rental property |
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Hello,
I recently sold a rental home that has been rented for the last five years. I do not plan to reinvest in like-kind property, I just want to save the profits. Do I need to pay estimated tax to the Fed before 12/31/04 or can I wait until I file my taxes next year and pay it before 4/15/05 without an underpayment penalty?
Thanks in advance!
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Wed Sep 01, 2004 12:08 am |
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Andrew
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In my case, I payed income tax on rental income for the previous year, each year, by the regular due date, in April.
I'm no expert, but I'm not aware of any reason to pay by the end of the calendar year.
Perhaps you've heard different, or have some special case...?
Here's a relevant IRS link, although it didn't seem to talk about due dates.
http://www.irs.gov/publications/p527/ar02.html
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Wed Sep 01, 2004 11:23 pm |
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tnrbriz
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Thanks, Andrew. I'll look throught this and see what it says. I should have been more clear in my question by saying -- "Do I need to pay estimated tax to the Fed before 12/31/04 [on the capital gain from the sale] or can I wait until I file my taxes next year and pay it before 4/15/05 without an underpayment penalty?"
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Wed Sep 01, 2004 11:52 pm |
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REI Houston
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As always...check with a CPA who is familiar with real estate investing. Ask for references from other R.E. investors.
Jerel
"Great spirits have always encountered violent opposition from mediocre minds." Albert Einstein
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Fri Sep 03, 2004 9:50 pm |
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BlankenshipFP
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The primary consideration here is just how much your tax liability will be. The rule of thumb is that you will not owe a penalty for underpayment of estimated tax if the amount you have paid via withholding or estimated tax payments is at least 90% of your tax liability for the current year, or 100% of the tax liability for the previous year.
Hope this helps.
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Wed Oct 27, 2004 6:40 pm |
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BlankenshipFP
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... following up on the previous post:
You would also not owe a penalty if the total of your tax liability minus the withholding, estimated payments and credits is less than $1,000.
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Fri Oct 29, 2004 1:37 pm |
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