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I had a gain on the sale of a property why did my premium tax credit change"

i answered the questions about health insurance and it calculated that i had to repay $1894 of the $3,010 of premium tax  credit i had received by using the year of marriage option    i then entered information about the sale of my personal residence however, the residence had been a rental for 4 months prior to the sale so i had to enter the depreciation taken in 2017   when i did that it eliminated the premium credit and said i had to repay the whole $3,010   why did the premium tax credit change

10 Replies

I had a gain on the sale of a property why did my premium tax credit change"

Stick to one post please. 

I had a gain on the sale of a property why did my premium tax credit change"

not sure what you mean but the two posts are related

I had a gain on the sale of a property why did my premium tax credit change"

because they are related it is best to stick with one post please .... <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/users/5c83acf0-3519-4dd8-9b34-991c2f66f7df">https://ttlc.intuit.com/users/5c...>

I had a gain on the sale of a property why did my premium tax credit change"

Because the 4 months of depreciation recapture is considered income, which means your premium tax credit is reduced.

I had a gain on the sale of a property why did my premium tax credit change"

but it appears that the tax credit was reduced dollar for dollar by the increase in income  yet the credit, because it was based on the year of marriage alternative method was not calculated based on income but on the three months of coverage prior to marriage

I had a gain on the sale of a property why did my premium tax credit change"

Without seeing your tax return, it is difficult to know what happened.  But, if you use the first year of marriage alternative, it allows you to halve your joint income for the months you were unmarried.  But the depreciation recapture will still figure into the calculations, both for the months you were married and the months you were not.

I had a gain on the sale of a property why did my premium tax credit change"

The Alternative Method for the year of marriage is still based on your Joint income, but it only uses 1/2 of the Joint income for the pre-marriage months.  So it is VERY common that the Alternative Method does NOT reduce the amount you need to repay.

What did the program tell you about the Premium Tax Credit BEFORE you entered the sale of the home?

Besides the last 4 months or so, was it always your main home as long as you owned it?

Look at the tax return, specifically Lines 13 and 14 of Schedule 1.  That is where the gain from the sale shows up.  Does the amount on that line seem right (the amount of depreciation that you had taken, after compensating for any other sales of other property or stock or whatever)?  Or is that showing your ENTIRE gain from the sale (no personal residence exclusion)?

Are you or your spouse self employed?

I had a gain on the sale of a property why did my premium tax credit change"

the total amount of premium tax credit was $3010   prior to entering the house sale but after completing form 8962 and utilizing the year of marriage alternative the premium credit to repay was $1894 line 13 of schedule 1 was $2548  and tax due $1615.   after entering the depreciation recapture of $1235, line 13 of schedule 1 went up to $3783, which seems correct, but the tax went from $1615 to $2744 with most of that because the premium tax credit to repay went to the full $3010.  When you look at form 8962 line 9 changed from yes to No as if something about this kind of sale makes you ineligible to use the alternative year of marriage provision.

I had a gain on the sale of a property why did my premium tax credit change"

Line 9 is only checked *IF* the Alternative Method reduces your repayment.

I suspect that 'extra' amount of income put you over the repayment limitation.  Before adding the house sale, what is on Line 5 of Form 8962?  You can see there is a repayment limitation on Line 28, but that 'extra' amount of income put you over the 400% threshold, there is no repayment limit.

I had a gain on the sale of a property why did my premium tax credit change"

it was already 401%   
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