I would like to do tax gain harvesting this month (next couple of days) before 2024 ends, as much as I can do (which would probably be a lot of gains that would be untaxed, like >$70k worth) within the 0% tax bracket on long term capital gains...but my spouse and I are also on MAGI-based Medicaid (by MAGI-based, I mean the sort available to people under 65 in states that voted to expand Medicaid).
The long term capital gains realized would definitely count as income in December and would put us way over the income eligibility cutoff for MAGI-based Medicaid.
The rule is that a one-time "windfall" amount should disqualify one for Medicaid for that month only and then, and if one's monthly income after that still qualifies for Medicaid, one can continue on.
However, I also did a tax gain harvest at the end of 2023 (though that was while the previous and now ended Public Health Emergency was still in place for me and so it didn't affect eligibility). But it's not like these are "scheduled" and expected amounts, either, so I would hope each would count as a "one time" amount.
I have (as yet unscheduled) minor surgery that that I'm going to have to get in 2025 and so I'd really rather remain on Medicaid in 2025 for that and other reasons. But I am concerned that Medicaid may find my tax gain harvesting a reason to conclude that I shouldn't be eligible, even though the language of the law suggests it shouldn't.
So I don't know if I should do the tax gain harvesting or not. To not do it strikes me as giving up a serious tax savings. Assuming I could tax gain harvest $70k that would otherwise be taxed at 15%, then that's a savings of $10,500 (though I would have to pay state income tax on that amount in the amount of about $2k). But to do it concerns me in terms of continued eligibility.
How might I want to think about this?
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