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Posted on 12/06/2025 11:53:43 AM PST by LouAvul
Specifically, income producing property? If one has rental units that sold, does that person pay a higher Medicare premium for a year?
Any adverse consequence other than a capital gain tax?
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Depends if there’s an asset limit.
Part B or some other?
Are you getting a subsidy?
The sale of real estate can indeed affect Medicare premiums due to the Income-Related Monthly Adjustment Amount (IRMAA). When a property is sold, the capital gains from the sale are included in the Modified Adjusted Gross Income (MAGI) calculation for Medicare premiums. If the MAGI exceeds certain income thresholds, it can lead to higher Medicare premiums for both Part B and Part D.
Capital Gains: The profit from the sale is considered income and can increase your MAGI.
MAGI Calculation: Medicare premiums are adjusted based on MAGI from two years prior.
IRMAA Impact: Higher MAGI can trigger higher IRMAA, leading to increased Medicare premiums.
It is important to report significant life events like selling a home to the Social Security Administration to avoid penalties and to explore Special Enrollment Periods (SEPs) for adjustments to Medicare coverage. Consulting with a financial planner can help manage the impact of a home sale on Medicare premiums.
Probably because in their twisted logic a cap gain turns into income for the Modified Adjusted Gross Income. Welcome to IRMA. Another penalty for being successful.
I sold a 4 unit owned for 20 years about 6 years ago and I don’t recall any change in the payment. Rules may have changed, though...
You may also get hammered when it comes time for RMD.
Curious thing about that. You will have to pay tax on the RMD as regular income but you can’t also use that event to roll it over into a Roth. That is a separate event that is taxes as another regular income event. But since it is additional regular income it is taxed at another an yet higher rate.
You are correct. It is IMRAA. Slight modification . . . it will touch Part C (Advantage), too.
The OP should check with an accountant and find ways to allocate costs to those rental unit sales. Drag the income down.
It’s only for 1 year, too, presuming the next year won’t have more units sold for big gains.
$106,000 for single filers and $212,000 for joint. This includes tax exempt income as opposed to AGI. That’s the first step up and there are several more at higher income levels.
Well done. Did you look that up or do you remember it from a personal experience?
A penalty for being successful even though you likely paid in huge amounts of unlimited medicare tax while working. Seems like at some point we should be old enough and have “contributed” enough that we should not have to pay income taxes anymore since we aren’t working.
I can dream can’t I?
nope...ALL Medicare beneficiaries are subject to HIGHER premiums TWO years after they report a large taxable income!
The CMS looks to the IRS to report TAXABLE income from two prior years and IF the couples filing jointly have an Modified Adjusted Gross Income OVER $212,000 in 2023, then both beneficiaries pay a monthly premium of $259, instead of the $185 that most of us are paying in 2025. The single filer pays the $259 with AMGIncome above $106,000. Success breeds bigger premiums! If your joint income is above $750K you get to pay $629 per month! Congrats on your windfall! The numbers will adjust upward for inflation each year... ymmv
Any high income causes the premiums to skyrocket for two years. Had a client that it cost him and his wife over $16,000 per year each for 2 years.
The income-related monthly adjustment amount (IRMAA) applies to individuals with modified adjusted gross incomes exceeding $109,000 and couples exceeding $218,000.
The IRMAA is calculated on a sliding scale with five income brackets, topping out at $500,000 for individual filing and $750,000 for married, filing jointly. These figures, except for the top bracket, are inflation-adjusted annually. For 2026, these inflation-adjusted brackets range from $109,000 to $205,000 for single tax filers and $218,000 to $410,000 for joint filers.
IRMAA calculations have a two-year lag. Whether you pay an IRMAA in a given year depends on your tax returns from two years ago.
In other words, your 2026 IRMAA liability is based on your MAGI from 2024.
My clients Medicare Part B premiums went to $690 per month for each husband and wife or $1,380 for both. It costs them $16,560 per year for Medicare Part B!
This was due to liquidating some stock.
Yes, and it will impact Part D drug premium, which go from zero when you are paying the $185 this year ...to an extra $13.70 monthly per person... or an extra $85.50 per person in 2025 for the $750K plus earners! The taxman gets his cut on the onetime windfalls... ymmv
I can’t remember Jack Digested matter. I looked it up.
I have rental units, but they’re mostly mobile homes I rebuilt after the banks repossessed them. So I have too much in them for what I’d be able to sell them for. Mostly, the land is worth more by itself without the homes.
My plan is to will them to some poor soul.
The sale of rental units, which results in capital gains, impacts Medicare premiums through the Income-Related Monthly Adjustment Amount (IRMAA) system.
IRMAA increases Medicare Part B and Part D premiums based on an individual’s Modified Adjusted Gross Income (MAGI) from two years prior.
Therefore, if rental units were sold in 2024, the capital gains from that sale will be reported on the 2024 (in reporting year 2025) tax return and will affect the 2026 Medicare premiums.
This means the individual would pay a higher Medicare premium for 2026 due to the one-time income spike from the sale.
While a one-time event like a property sale is not considered a "life-changing event" by Social Security, which could trigger a reassessment, individuals can still request a reconsideration by filing and providing documentation of the sale.
If successful, the premium increase could be adjusted for the following year. (Which I assume they mean year 2027)
So, I guess you should file Form SSA-44 now to make sure that you do not carry that same increase into 2027.
Hope that helps, if not blame AI. 😁🤙
His wife was really pissed and he had to reimburse her for her lost Social Security benefits as that was her spending money.
Actually the Premium grid goes up up and away to the last bracket at above $500,000 for Single filers and above $750K for joint filers, the top bracket paying $629.90 per month each of joint Part B premium and $85.80 for single Part D.
If you have more money, you should not need as much government assistance. Isn’t that what being a conservative is all about?
Yep, welcome to “means testing”!
thanx for posting
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