When considering the 7.5% threshold in taking a deduction for medical expenses, are capital gains including in this calculation? We are in the process of selling our house, which we hope will close sometime in October or November. We are expecting a good-sized capital gains for the year (after the basis and $500K exemption). I suspect we are about to lose out on being able to deduct our medical expenses for this year's taxes, but I thought I would check.