Maybe I am not explaining the setup properly.If the 200k is more than 50% capital gains, and he needs to get only 25k income for two or three years (until 59.5 for IRA access), then he might as well harvest the gains beyond that now, when it won't affect MAGI. He can immediately buy back the investment without penalty (as opposed to the loss harvesting rules). Then if he needs to access the taxable account while on the ACA, the affect on MAGI will not include the harvested gain, making the taxable account more accessible if it needs to be tapped for addition expenses.
Goal 1: To produce a MAGI of $25,000 to get the ACA subsidy.
Goal 2: To have liquidity, as my sibling needs at least $35,000 a year, so another $10,000 is needed that does not count toward MAGI.
Doing it your way, the only way to produce $25,000 in MAGI income later would be by withdrawing $25,000 from a pre-tax retirement account using the Rule of 55. Moreover, my sibling would be paying a 15% capital gains tax rate. Doing it my way, my sibling would be paying a 0% capital gains tax rate when taking money from the taxable account.
Statistics: Posted by student — Tue Nov 04, 2025 9:53 pm — Replies 30 — Views 3211