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
NPN #2033715
A one-time income event can raise your Medicare costs two years later. This guide shows how home sales, Roth conversions, and capital gains can trip the IRMAA brackets before you act.
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 What does not count: gains realized inside an IRA or 401(k) — those matter only when money is withdrawn — and gains inside a Roth, which never count at all.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.
Capital gains from selling stock, a business, or an investment property count toward the income Medicare measures for IRMAA. The higher Medicare premium does not arrive right away. Income from two years back sets the current year’s premiums, so a sale in 2024 can raise 2026 premiums.
Printed from JasonKnowsMedicare.com — “Do Capital Gains Affect IRMAA?”. The free “Before You Sell the House or Convert That IRA” guide is available at JasonKnowsMedicare.com/pages/free-medicare-guides · Questions: (850) 810-1000
You can find all 10 free Medicare guides as PDFs on the Free Medicare Guides page.
This page is educational information, not personal financial, tax, or legal advice. For decisions about your own situation, talk with a qualified professional.