Do I have to pay estimated quarterly taxes on capital gains, long term or short term?

Question

My question is, let's say I put 50k in a stock, and it doubles the next day and I sell. So now I have 100k, but I owe takes on 50k. Let's suppose this was done in January of 2007. Can I wait until April 15 of 2008 to pay the taxes, or do I have to make estimated quarterly taxes in April of 2007? I have never heard of this estimated taxes nonesense. When does it apply?

Answer 1

From the IRS website:

Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards

Who Must Pay Estimated Tax

If you had a tax liability for 2006, you may have to pay estimated tax for 2007.

General Rule
You must pay estimated tax for 2007 if both of the following apply.

You expect to owe at least $1000 in tax for 2007 after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of;
90% of the tax to be shown on your 2007 tax return, or
100% of the tax shown on your 2006 tax return. Your 2006 tax return must cover all 12 months.

Answer 2

If you are going to owe over $1000 when you file your return, you'll pay a penalty for underwithholding if you don't make estimated payments.

Answer 3

Yes, you have to make estimated tax payments if it is required as per estimated tax rules.

Answer 4

You already asked this question once, 15 minutes earlier. My (correct) answer hasn't changed since then. Go back and read my other response.