ACA estimated income from capital gains distributions?

[Ramen]

Sorry if I'm missing this basic question in the search. Not seeing anything about this specifically.

When I apply for an ACA subsidy during fall open enrollment, is there a way to estimate my following year's mutual fund capital gains distributions on an active fund?

My annual December payouts have averaged in the $10K-$15K range, except last year I got a surprise of nearly $30K. In future years, this could mean the difference between qualifying for ACA vs. expanded Medicaid. I don't want to give a wrong estimate and end up on the wrong plan for the following year. I'm OK with being on either plan. I just want it to match my actual income.

I know I can report changes after enrollment, but I'd rather get it right the first time. For one thing, if I end up on Medicaid again next January, as I did this year, based on mutual fund income from previous yearly averages, it can be hard/impossible to get off because I'm locked in for the year (at least that's how my state does it).

Come this fall, if I estimate based on last year's unexpectedly large distro and the payout comes in much smaller (closer to the typical $10K-$15K range), then I'd end up on ACA when I should/could have qualified for expanded Medicaid again. Vice versa if I estimate too low.

Examples:

Based on capital gains distributions in previous years, say I estimate that my investment income for 2022 will be $15K-$20K. This puts me in Medicaid range. Come the end of 2022, say I get another unexpected $30K distro. Oops, I should have been on ACA after all, but now it's too late to report a change.

Then, in making an estimate for the following year, 2023, say I use the unexpected $30K payout as a best guess. But then come December 2023, say I get a more typical $15K. Oops, I should/could have been on Medicaid, but now it's too late to report a change.

This could go on for years if one is in a lean FIRE with an annual investment income straddling the ACA-Medicaid line. I'm familiar with Roth conversions for staying in ACA range, but quite frankly, expanded Medicaid here is better than a Bronze HD plan and I'd rather have it in years when I legitimately qualify.

Anyone else navigating this?

 

[PaunchyPirate]

I don’t think there is any magic way to help you predict the future, as you have already found out. Active Managed funds will buy and sell in an attempt to make the most money they can. But it’s not predictable.

You could have somewhat more predictable distributions if you switched to indexed mutual funds, but even they don’t adhere to any published rules really on distribution levels. You also didn’t indicate you were interested in changing your investments.

About all you can do is make a guesstimate based on previous patterns.

 

[Which Roger]

If the gains are realized in December, and you know how much, and your income is still lower than you want, then you can sell something else before the end of the year to realize some more gains.

 

[Ramen]

You could have somewhat more predictable distributions if you switched to indexed mutual funds, but even they don’t adhere to any published rules really on distribution levels. You also didn’t indicate you were interested in changing your investments.

If I could do it all over again, I might have chosen index funds or even ETFs, but selling now to change investments would be a whopping tax hit.

If the gains are realized in December, and you know how much, and your income is still lower than you want, then you can sell something else before the end of the year to realize some more gains.

Right, this is my plan. Not as worried about having less in distributions than I need. I'm more concerned about over/underestimating income for ACA/Medicaid purposes and getting dinged, even though there's no way I can predict the future. I want to be as aboveboard as possible, but I guess the system isn't set up for the unknown.