Yes — capital gains affect IRMAA, Medicare’s income-related premium surcharge. Every taxable capital gain is included in adjusted gross income, which feeds the modified adjusted gross income (MAGI) figure Medicare checks against its surcharge thresholds — and even long-term gains taxed at reduced rates, including gains that owe no income tax at all, still count dollar for dollar.
Revised: 7/24/26
Jason Baar
Fee-Only Medicare Advisor
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It covers Roth conversions, capital gains, home sales, filing status, and HSAs — with the 2026 bracket lines and worked examples.
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The long answer
This shows up in ordinary situations, not just big sales. Mutual fund capital gain distributions count even when they are automatically reinvested. Rebalancing a brokerage account counts. So does selling shares to raise cash. What does not count: gains realized inside an IRA or 401(k) — those matter only when money is withdrawn — and gains inside a Roth, which never count at all.
For 2026, the surcharge thresholds sit at $109,000 of MAGI for single filers and $218,000 for joint filers, per the Social Security Administration, and the effect arrives two years after the gain: 2024 gains, 2026 premiums.
If gains put you near a line, the tools are ordinary tax tools — harvesting losses to offset gains, splitting a sale across December and January, checking projected fund distributions late in the year. And if a line does get crossed, the surcharge lasts one year before the calculation resets.
Printed from JasonKnowsMedicare.com — “Do Capital Gains Affect IRMAA?”. The free “Before You Sell the House or Convert That IRA” guide is available at tally.so/r/0QgAAZ · Questions: (850) 810-1000
This page is educational information, not personal financial, tax, or legal advice. For decisions about your own situation, talk with a qualified professional.