Capital gains and medical deduction (taxes)

[statsman]

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.

 

[Crabby Mike]

Yes -- the number used is adjusted gross income, which includes everything on the first page of the 1040 (at least before it became a "postcard"). But don't forget, the increase in the standard deduction to $24,000 (plus $1,300 each for over-65) will make it pointless for many to do itemized deductions starting this year.

 

[statsman]

Yes -- the number used is adjusted gross income, which includes everything on the first page of the 1040 (at least before it became a "postcard"). But don't forget, the increase in the standard deduction to $24,000 (plus $1,300 each for over-65) will make it pointless for many to do itemized deductions starting this year.

Thanks. For our situation, we were looking to lose about $500 or so in federal taxes this year because of the tax law changes. With the house sale, I think we end up a little better than we would have with the old tax system. Of course, my wife's Medicare premiums are going to spike in 2020 because of the capital gains.

 

[kaneohe]

sorry you mentioned the exemption already in OP........