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social security impacted by home sale

By Terry Savage on January 17, 2022 | Financial Planning / Retirement

My husband is 75 and did receive a SS payment of $1641 a month.
I am 73 and did receive $758 a month.

We had a small business ( airbnb) and sold the house used for this in Dec 2020. Of course we ended up paying over $45,000 in capital gains as the housing market went up and we took advantage of it to put money into our retirement account.
We received a letter in Dec, 2021, indicating that since we made so much money in 2021 , our SS was being lowered to $1401 and $460 . We try to get ahead and save for the future and now this. How can the government take our SS away? It would have been informative if our accountant had informed us that this would happen. He is no longer our accountant. Thank you for your insight.

Terry Says

First of all, I can’t imagine how you paid taxes on the gain on your house. Married couples can exclude $500,000 of gains from their taxes when they sell their primary residence!! Did you buy so long ago that you had a gain much larger than that exclusion??
If not, your accountant can be held liable for terrible tax advice!

And it’s not your Social Security that gets adjusted for higher income; it’s your MEDICARE premium, which of course is deducted from your SS check. And that will last for two years, until it gets adjusted downward based on your regular income.

Please write back and let me know about that gain, though. If it was under $500k, then you’ll need to file an amended return and contact SS to let them know.

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