Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Second home sale capital gain and ACA
Old 11-04-2015, 04:13 PM   #1
Recycles dryer sheets
fisherman's Avatar
 
Join Date: Jul 2007
Posts: 478
Second home sale capital gain and ACA

We are seriously looking at selling our Lake house next spring and factoring that into our ACA plan choice. Since it is a second home it looks like we would owe 15% Capital Gains on the profit since we have owned it for several years. The profit on the sale will raise our MAGI well above any subsidy level. If I am understanding this correctly we will owe 15% tax on the income plus lose our subsidy for they year. Since we are able to control our taxable income we usually get a big subsidy.

Given the above I am looking at the lowest cost insurance option and hoping for no big medical issues next year. I would appreciate in tax guidance or ideas the group can share for this situation.
__________________

__________________
Worked the plan and now living the Dream!
fisherman is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-04-2015, 04:36 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
Your conclusion that you would owe capital gains tax and you would not be eligible for a subsidy seems sound.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 11-04-2015, 04:55 PM   #3
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,418
Quote:
Originally Posted by fisherman View Post
Given the above I am looking at the lowest cost insurance option and hoping for no big medical issues next year. I would appreciate in tax guidance or ideas the group can share for this situation.
That additional cap gain also means a smaller medical expense deduction. An HSA eligible policy will at least give you an above the line exemption from income of $3350 individual / $6350 family, plus an additional $1K per person over age 55.
__________________
MichaelB is offline   Reply With Quote
Old 11-05-2015, 08:38 PM   #4
Recycles dryer sheets
fisherman's Avatar
 
Join Date: Jul 2007
Posts: 478
For others that might fall into this situation it looks like an installment sale would be the way to go. It's paid for so certainly possible if we can work with the buyer.
__________________
Worked the plan and now living the Dream!
fisherman is offline   Reply With Quote
Old 11-06-2015, 06:13 AM   #5
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
My extremely elderly mom sold her home in 2011, she got slapped with a bigger social security monthly deduction, it went on for a year it was part of the obamacare surcharge. She had to suk it up for 12 months and then it went away.
__________________
retiredinnyc is offline   Reply With Quote
Old 11-06-2015, 07:37 AM   #6
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,418
Quote:
Originally Posted by retiredinnyc View Post
My extremely elderly mom sold her home in 2011, she got slapped with a bigger social security monthly deduction, it went on for a year it was part of the obamacare surcharge. She had to suk it up for 12 months and then it went away.
There was no "obamacare surcharge" in 2011 or 2012. Medicare B premiums were already subject to income levels, and the ACA froze the income levels through 2019, effectively removing inflation adjustment.
__________________
MichaelB is offline   Reply With Quote
Old 11-06-2015, 07:44 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
Michael, please don't confuse the situation by introducing facts. Don't you know it has to be Obamacare's fault?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
This is what I was told
Old 11-06-2015, 08:48 AM   #8
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
This is what I was told

When I called social security on her behalf I was told due to ACA she had to pay a part D fee and as a high income earner she had to pay more for her part B, the poster was asking if selling a home with profits would count , in my experience it would,and btw even the President has called it Obamamacare
__________________
retiredinnyc is offline   Reply With Quote
Old 11-06-2015, 08:56 AM   #9
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,825
Quote:
Originally Posted by fisherman View Post
For others that might fall into this situation it looks like an installment sale would be the way to go. It's paid for so certainly possible if we can work with the buyer.
Or if the real estate outlook looks good and the monthly numbers work-out (cash flow neutral or positive), you could just turn it over to a rental management company. Sell once you hit 65 without ACA impact at least.
__________________
sengsational is online now   Reply With Quote
Old 11-06-2015, 09:02 AM   #10
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,418
Quote:
Originally Posted by retiredinnyc View Post
When I called social security on her behalf I was told due to ACA she had to pay a part D fee and as a high income earner she had to pay more for her part B, the poster was asking if selling a home with profits would count , in my experience it would,and btw even the President has called it Obamamacare
The only change to Medicare D from the ACA was to reduce the famous "donut hole" or cost sharing. ACA did not increase Medicare D premiums, which were in place long before the ACA was passed.
__________________
MichaelB is offline   Reply With Quote
Old 11-06-2015, 09:11 AM   #11
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
She never paid 1 cent to part d , after the sale she paid for 12 months
__________________
retiredinnyc is offline   Reply With Quote
Old 11-06-2015, 09:12 AM   #12
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
After 12 moths it went back down to 104.90 for b and zero for d
__________________
retiredinnyc is offline   Reply With Quote
Old 11-06-2015, 09:14 AM   #13
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
And since you seem to have an obsession with my posts, I was answering the fellow who was thinking of selling a property if capital gains would count as income towards ACA, I'm my experience it affected social security that's what I was sharing
__________________
retiredinnyc is offline   Reply With Quote
Old 11-06-2015, 09:20 AM   #14
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,418
Quote:
Originally Posted by retiredinnyc View Post
And since you seem to have an obsession with my posts, I was answering the fellow who was thinking of selling a property if capital gains would count as income towards ACA, I'm my experience it affected social security that's what I was sharing
Please, no obsession, certainly nothing personal. Let's keep it respectful and friendly.
__________________
MichaelB is offline   Reply With Quote
Old 11-06-2015, 09:20 AM   #15
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
retired, that "NY state of mind" won't get you very far here arguing with a moderator on the forum.

It appears to me you are confused/got bad info on your call to SS as to why your mom had those higher deductions on her SS check. The ACA/Obamacare reasoning doesn't hold water.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 11-06-2015, 09:22 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
+1 I'm certain that SS customer service reps never give callers a wrong answer, so who knows what really happened.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 11-06-2015, 09:27 AM   #17
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
Bad info or not she got banged for more money on a part b and a part d after the sale
__________________
retiredinnyc is offline   Reply With Quote
If told you what happened
Old 11-06-2015, 09:42 AM   #18
gone traveling
 
Join Date: Sep 2015
Location: NYC
Posts: 52
If told you what happened

Quote:
Originally Posted by pb4uski View Post
+1 I'm certain that SS customer service reps never give callers a wrong answer, so who knows what really happened.
.i told you what happened
__________________

__________________
retiredinnyc is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Gain on Sale of Inherited Home jimnjana Other topics 5 10-26-2012 10:38 PM
Capital gain from sale of rental property Purron FIRE and Money 4 03-27-2008 02:16 PM
Dividends and Capital gain Questions eudaimoniac FIRE and Money 5 01-27-2008 04:38 AM
Tax question regard 2008 capital gain rate teejayevans FIRE and Money 3 12-10-2007 10:01 PM
Capital gain tax questions farmerEd Other topics 38 10-31-2004 03:31 AM

 

 
All times are GMT -6. The time now is 12:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.