Stock sales impact on insurance subsidy
If you sell a stock or mutual fund and withdraw the money, does it count as income as far as the health markets? I receive some subsidy for my insurance premium.
Terry Says
Oh great question. If you sell a stock or mutual fund held OUTSIDE a retirement account, then there may be a gain or loss. If you held that stock or fund for more than a year it is considered a capital gain, which is taxed at a lower rate than ordinary income. But YES, that gain is added to your income — and could impact any insurance subsidy. By the way, that applies to redeeming U.S. Savings Bonds as well. So try to manage your sales to stay below the income limits for your benefits. (If you sell at a loss, it can actually reduce your income!)
BUT if the stock or fund is held inside an Individual Retirement Account, it will eventually be taxed as ordinary income WHEN YOU WITHDRAW money from your IRA. But it won’t be considered income until you withdraw it. That withdrawal could also impact subsidies and benefits.
