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Level 15
Level 15

Get your taxes done using TurboTax

Yes, the lump-sum Social Security payment could possibly push some or all of your gain on the sale of the house into the 15% bracket. The long-term capital gain is "stacked" on top of your taxable ordinary income when calculating the tax on the gain. The gain is not necessarily all taxed at the same rate. It's possible that some of the gain will fall in the 0% bracket and some in the 15% bracket.


The calculations are very complicated. The results will depend on a number of factors, and there are complicated interactions between the various factors. Among the factors that could be involved are the lump-sum election for the back payment of Social Security, which might help, and the Section 121 exclusion of gain on the sale of your home. The best way to see what might happen would be to do a trial tax return. If you do that, do not use the TurboTax Online account that you used for your actual tax return. You don't want to make changes to the tax return that you filed.