Menu

Expected $108k tax bill, where to withdraw cash?

Home Tax Reduction Expected $108k tax bill, where to withdraw cash?

  • Avatar Golfer68 
    Participant
    Status: Physician
    Posts: 60
    Joined: 02/08/2017

    Due to selling house on left coast for 600k+ in profit (single, only $250k free of capial gains free) owe $108k in taxes for 2018.  Retired, pension and SS income will combine for $40k in 2019.  Have RMD of $22k this year so that leaves us in the $62k tax bracket (22% income tax, 20% short term gapital gains) and with $86k needed to be withdrawn to add up to $108.

    Below are our options from our taxable account (imagine it doesn’t make sense to take out of IRA and pay income tax):

    -VTBLX $205k total, $5k of which is short gains

    -VTABX $137k total, $2.5 of which is short gains

    -VTMGX $168k total, $15k of which is short gains

    -VEMAX $31k total, $4k of which is short gains

    -VTCLX $340 total, $41k of which is long gains

     

    #198247 Reply
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2061
    Joined: 08/01/2016

    I am very confused by the whole thing.

    When you sold the house you made a 600K profit. You must have known that after the $250K CG tax free you will have to pay taxes on the $350K gain. Did you not put aside $150K or so from the sale in short term money market / bonds to pay that tax?

    P.S. Reading second time it appears you invested all the gains. In which case use the LTCG fund.

    #198269 Reply
    Faithful Steward Faithful Steward 
    Participant
    Status: Financial Advisor, Small Business Owner
    Posts: 267
    Joined: 06/12/2017

    You need to sell shares of VTCLX. selling the shares of the finds with only short-term gains will exacerbate your tax problem even more than selling the fund with long-term gains.

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors
    http://www.fswealthadvisors.com | (717) 496-0900

    #198335 Reply
    Avatar Golfer68 
    Participant
    Status: Physician
    Posts: 60
    Joined: 02/08/2017

    O really u think? Because was thinking of selling some of the bonds because only $2.5k in capital gains so tax bracket will only go up that much?

    #198337 Reply

Reply To: Expected $108k tax bill, where to withdraw cash?

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

you're currently offline

Notifications Mark all as read  |  Clear