Social Security & Medicare

Sales proceeds less selling expenses less cost of house and improvements over the years (or step up in basis from death of husband) = gain.

If she’s lived in the house 2 out of the last 5 years, she can exclude up to $250,000 of gain.

Once you’ve determined the net gain and added it to her tax return, you will use Adjusted Gross Income from that return plus any tax exempt income to come to Modified Adjusted Gross Income (MAGI). Here are the Medicare premium brackets for MAGI:

Tier 1: $103,000 – $129,000 (individual) → +$66.90
Tier 2: $129,001 – $161,000 → +$167.80
Tier 3: $161,001 – $193,000 → +$268.50
Tier 4: $193,001 – $500,000 → +$369.10
Tier 5: Over $500,000 → +$419.30

Any premium increase due to increased income lasts for only for two years