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I had surprise capital gains in late December (thanks, Vanguard!) which has made my tax bill quite large. I also owe an underpayment penalty - is the CG making it worse?

Forum|Forum|4 years ago
April 4, 2022
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This is a state penalty (California) and the CG event was a significant fraction of my total income for the year.

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Best answer by LeonardS

You may file a reasonable cause - claim for refund, with the Franchise Tax Board (FTB)

This link to the FTB https://Help with penalties and fees has an online form that you can fill out to request the underpayment payment penalty be waived.

@thockin

LeonardS

Yes, the capital gains that you received in late December would be the most likely cause of your underpayment penalty. This is especially true if no taxes were withheld on the distribution. You can approximate the additional tax liability due to the capital gains from this chart by multiplying your Vanguard capital gains by the % for your Filing Status.

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T

thockinAuthor

Since the CG even was on December 29th and was outside of my control, how can I get the penalty waived?

LeonardSAnswer

You may file a reasonable cause - claim for refund, with the Franchise Tax Board (FTB)

This link to the FTB https://Help with penalties and fees has an online form that you can fill out to request the underpayment payment penalty be waived.

@thockin

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