tax liabilities for one time large payment from sale of shareholder stock
my company was just sold. i will continue to work there in future. I had small share investment that resulted in a half million dollar payout. I am single with no deductions. i do max out 401 currently. Will tax on this fall under capital gain, net investment tax, or some other filing? I will likely seek an adviser. Also , how soon should this be reported? Thanks for any suggestions and look forward to hearing from you.
Terry Says
If your company was sold in 2022, the tax obligation must be reported a year from now. BUT, you should make quarterly estimated tax payments every quarter to avoid a penalty. The company itself will tell you whether the sale was structured so you are eligible to take this as a long-term capital gain. But unless you held stock in the company for more than a year, and it was the stock that was sold, it is doubtful this will qualify for capital gains. But they will know based on the structure of the deal.
If the deal closed in 2021, then you need to get on top of this immediately. And in any case you need a CPA to advise you on the quarterly estimates that will be due.
Then, yes, you need to do some financial and tax planning. This is a rare opportunity — no matter what your age — to get yourself on the path to long-lasting financial security. Please don’t just go running around asking friends and family what to do with a half million dollars. Go to www.Wealthramp.com to find a FEE-ONLY Certified Financial Planner who is also a FIDUCIARY– promises to put your interests first. You will be matched with a carefully vetted planner (not all qualify to get on this site) and no one will call you. You make the call!
