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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (712)	3/5/1998 11:31:00 PM
From: Mr. Pink	Respond to of 5810

To those more knowledgable: I am about to ask a totally moronic question: Say there's this student with no income who sells a certain # of shares of XYZ corp. on December 1 and 31, 1997. The stock was held for about 3 years so he figures the long-term rate schedule applies. The student figures out the capital gains tax on the sale, which comes out to 550.00 (line 64 of form 1040). Seeing that line 65 says something about an estimated tax penalty, the student refers to the instruction booklet, which says he may owe a penalty if the amount on line 64 is more than 500.00. So the student downloads form 2210 and instructions to figure out the estimated tax penalty. This form is totally confusing. Have I been missing something? Was I supposed to figure out the capital gains tax on the sale and mail the tax payment in ASAP, instead of waiting to pay this tax via my 1998 1040? Does this mean that from now on, whenever I sell some shares, I have to figure the capital gains tax on each sale and therefore end up sending small checks to the IRS throughout the year (with each sale) to avoid the penalty? I'm totally clueless here. Someone please help me.