Capital Gains

[ustpgrk]

I have undeveloped property that I have owned for several years and paid 40K. I now have an offer to sell the property for 175K. I understand that I will owe Capital Gains tax (up to 20%) on the realized income, but have two questions.

1) Is the realized gain (135K) considered "income" for tax reporting purposes? In other words, will I owe income taxes and capital gains tax on the proceeds?

2) I am currently collecting Social Security. If the proceeds from the property are considered income, will that income have an adverse effect on my SS or Medicare payments?

Thanks for your time.

[Mike9241]

you will owe capital gains tax but that's part of the total income taxes.  a way to look at it is you'll pay tax on the capital gains and non-capital gains taxes on your other income 

2) likely because the gain will increase your adjusted gross income

see page 31 of 1040 instructions to determine taxability.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf 

[Carl]

I am currently collecting Social Security. If the proceeds from the property are considered income,

Yes. It's considered income.

will that income have an adverse effect on my SS or Medicare payments?

Payments, no. The SS payments you receive won't change. However, some or all up to a maximum of 85% of your social security could be taxable for that tax year. See https://faq.ssa.gov/en-us/Topic/article/KA-02471 for the scoop on this.