Hello, we are selling a piece of property. We are not going to build on it and it is better used for the profit to pay off our revolving dept. My question is that the taxes we will have to pay on this sale, where is a good place to put it to gain a little more interest than a regular savings account. Looking for something that for 6 to 12 months until tax time next year.
probably a CD
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Considering you need to pay the taxes within the quarterly period that the gain is realized, that is a 3-month maximum time horizon. So really an online savings account or a 8-week or 13-week Treasury Bill is about the best you are going to do with ZERO risk.
If you wait to pay them until next April, you might incur penalties and interest.
Disclaimer: I am not a tax professional and this is just opinion, not advice.
Yes. You’re correct as any estimated tax payments equal to the tax on the gains must occur in the quarter the sale occurs which June 15th can be difficult as you need to make the estimated payment before the sale if it occurs from June 16 to June 30.
That said, you can withhold 15-24% of the gain which gets around being late on the estimated tax payment as long as it’s made by Dec 31st. You can also withhold taxes at your state tax rate too. So another option though less desirable is to have the transaction withhold the necessary amount at closing or from your paycheck if you can withhold enough or from a brokerage account withdrawal