How is schedule 1 capital gains used for calculating modified AGI?

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Modified AGI starts with your Adjusted Gross Income and then adds back certain deductions and other items. Your Adjusted Gross Income includes the income on Schedule 1, including the capital gains. There's no adjustment of those capital gains in calculating Modified AGI.

Capital gains are included in AGI. Capital gains (line 14 of Schedule 1) are included in the total additional income on line 22 of schedule 1, then transferred to line 6 of form 1040. Note that the total of lines 1 thru 6 of form 1040 constitute your AGI.

Capital gain are not used in calculating modified AGI (MAGI). There are actually several different MAGIs, depending on which tax attribute is being calculated.