Situation:
I am on Medicare and wife is on Obamacare. Our income is usually about 29000 as far as MAGP is concerned. If I sell long term investments which keep my total income say at 65000 will the amount that is not taxed due to long term still enter into the calculation for MAGP or is it deducted before it goes into this calculation?
Capital gains are included in your household income regardless of how the gains are taxed
Go to this healthcare.gov website for what is included for household income - https://www.healthcare.gov/income-and-household-information/income/
@mostinc wrote:
...If I sell long term investments which keep my total income say at 65000 will the amount that is not taxed due to long term still enter into the calculation for MAGP or is it deducted before it goes into this calculation?
It is unclear, to me at least, whether you are referring to the capital gains tax rate or the total gain.
Regardless, your MAGI will include all of your net capital gains, even those that are taxed at 0%. For example, if your income without capital gains is $29,000 and you have $36,000 in long-term capital gains, then your MAGI would be $65,000 (i.e., it would include that part of the gain taxed at 0%).
Just making sure you understand that only the profit is in the AGI and not the gross sales price.
Understand this but in the example of let’s say 30k is profit but since total income for 2 is below the taxable threshold for long term gains thus no tax. How is this handled? Does it come over as zero income or is the income show up in the MAGI but not taxed?
only the year you had the capital gains. they only increase magi for that year and magi affects the credit amount.
The cap gains are included in the income for the ACA purposes EVEN if it will be taxed at zero %.