IRS Windfall

Our CPA did the numbers.  We did very well on paper, taking in more than enough from Social Security and my wife's monthly pension deposit to have some left over after expenses.  Nothing extravagant in the last year other than having to replace my car.  That left funds in storage, largely mutual funds, which the financial geeks traded frequently and successfully.  As they reaped profits, they purchased something else they thought would appreciate, raising the nominal value of our holdings.  The downside, as partial owners, we get to pay the capital gains taxes on the profits without really having the proceeds themselves.  Thus our tax preparer conveyed a very large obligation that we had to the IRS both for this year's filing and for estimated taxes in the coming year.  All this without being able to indulge in our share of these successful trades.

Fortunately our tax deferred assets remain immune from this for another two years, just growing in value, assuming the managers of those funds are as astute as the stock pickers of our taxable funds.