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.
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.
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?
Yep, welcome to “means testing”!
So let me see if I have this right. Because of Covid and the Biden inflation making property values increase by 35 to 100% they can now tax you capital gains and raise your medicare premiums while your state and locals are taxing you into oblivion. That about sum it up? You will own nothing and be happy.