Medicare Costs (IRMAA?) after a one-time Home Sale Capital Gain

[ShokWaveRider]

I hope this is the correct forum for this.

Here is my question for a marries couple:

Normally one's household income is say $150k. If one sells a home for say $1.6m in 2023 that had a cost basis (Purchase price) of $600k, the total capital gain will be $500k. ($1.6m - $500k allowance = $1.1m - $600k cost basis = $500k).

Does that mean that in 2025/2026 their Medicare part B payment going forward would be based on the 2023 Taxable income of $500k + $150k = $650k? The following 2 years will be back to $150k. I think it only affect the year following the capital gain, the following year then goes back to the normal premiums.

Or, is there an exclusion for one time home sales?

Thanks in advance for the responses.

 

[SevenUp]

According to https://www.ssa.gov/forms/ssa-44-ext.pdf, the reasons one can give to appeal an IRMAA increase are

Marriage
Divorce/Annulment
Death of Your Spouse
Work Stoppage
Work Reduction
Loss of Income-Producing Property
Loss of Pension Income
Employer Settlement Payment

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[MichaelB]

I hope this is the correct forum for this.

Here is my question for a marries couple:

Normally one's household income is say $150k. If one sells a home for say $1.6m in 2023 that had a cost basis (Purchase price) of $600k, the total capital gain will be $500k. ($1.6m - $500k allowance = $1.1m - $600k cost basis = $500k).

Does that mean that in 2025/2026 their Medicare part B payment going forward would be based on the 2023 Taxable income of $500k + $150k = $650k? The following 2 years will be back to $150k. I think it only affect the year following the capital gain, the following year then goes back to the normal premiums.

Or, is there an exclusion for one time home sales?

Thanks in advance for the responses.

If the house is sold in 2023 the capital gain will add to the MAGI for 2025 and lead to the IRMAA surcharge. In 2026 the gain no longer applies, MAGI returns to the lower level and the increased IRMAA goes away.

As sevenup posted, home sale capital gains is not an automatic exclusion. It doesn’t hurt to ask, though.