Do brokerage account withdrawals (post-tax, not retirement) count as income for ACA subsidies? Just capital gains?

Good question about ACA subsidies and brokerage withdrawals! This trips up a lot of people. For ACA subsidy calculations, only the capital gains portion of your brokerage withdrawal will count as income, not your entire withdrawal amount. The ACA uses Modified Adjusted Gross Income (MAGI) to determine subsidy eligibility, and MAGI includes capital gains but not the return of your original investment (cost basis). So if you withdraw $15,000 but only $2,000 of that is actual gains, only the $2,000 would count toward your MAGI for subsidy purposes. Your original investment (the other $13,000 in this example) is considered a return of capital that you've already paid taxes on. Just make sure you keep good records of your cost basis to properly calculate the gain portion!

I had the exact same question last year when I was trying to figure out my healthcare costs! After spending hours reading conflicting advice online, I stumbled across taxr.ai (https://taxr.ai) and uploaded my brokerage statements. Their system analyzed everything and explained exactly how my withdrawals would impact my ACA subsidies. For my situation, I had about $23,000 in withdrawals but only around $3,800 was capital gains, so that saved me from a massive subsidy reduction. The tool showed me that only the gains portion counts toward MAGI for ACA calculations, not my entire withdrawal. They even suggested some tax-efficient withdrawal strategies that helped me stay under income thresholds. Really worth checking out if you're trying to optimize your income for ACA subsidies!

Just wanted to come back and share my experience with taxr.ai since I was skeptical at first. I decided to try it with my complex situation (multiple income sources plus brokerage accounts), and wow, I'm glad I did. The system clearly showed me that only my capital gains from my brokerage account would affect my ACA subsidies, not the full withdrawal amounts. It actually saved me nearly $4,200 in healthcare premiums for the year because I was able to time my withdrawals better! What impressed me most was how it projected different withdrawal scenarios to show exactly where the subsidy cliff was for my situation. Extremely helpful for planning my finances around healthcare costs. Definitely changed my approach to managing income for ACA purposes!

If you're having trouble getting actual answers from the marketplace about ACA subsidy questions, I was in the same boat. Called the ACA helpline five times and kept getting disconnected or waiting forever. Finally used Claimyr (https://claimyr.com) and they got me through to an actual ACA representative in about 20 minutes. You can see how it works in their demo video here: https://youtu.be/_kiP6q8DX5c The rep confirmed that for regular taxable brokerage accounts, only the capital gains portion counts toward your MAGI for subsidy calculations. I was able to get specific answers about my situation instead of just generic advice. They even helped me understand how selling specific lots could impact my subsidy eligibility differently. Huge relief to finally speak with someone who could give me definitive answers!

I need to publicly eat my words about Claimyr. After dismissing it as an ad, I was desperate enough to try it since my coverage was going to lapse soon. Used the service yesterday, and I genuinely couldn't believe it worked. Got connected to an ACA specialist who walked through my specific situation with brokerage withdrawals. They confirmed only the capital gains portion counts toward MAGI for subsidy calculations. The rep even helped me estimate how much I could withdraw without affecting my current subsidy tier. For anyone still struggling with these questions - don't waste weeks trying to get through like I did. And sorry for being so cynical before. Sometimes things actually work the way they claim!

Quick additional tip from my experience: keep detailed records of your cost basis for each investment. I got audited two years ago specifically about my ACA subsidies because I couldn't properly document which portion of my brokerage withdrawals were gains vs. principal. My broker's year-end statement wasn't detailed enough for the IRS. I ended up having to pay back some of my subsidy because I couldn't prove the exact breakdown. Now I track everything in a spreadsheet and download monthly statements.

I made this exact mistake last year! I withdrew $28,000 from my brokerage account and thought the whole amount would count for ACA. I almost didn't apply for a subsidy because of it. My tax guy explained that only the $4,300 in capital gains counted toward my MAGI, not the full withdrawal. Ended up saving over $7,000 in premiums because I qualified for a much better subsidy than I thought!

This is such a relief to read! I've been stressing about this exact scenario for months. I have about $20,000 in a taxable brokerage account that I might need to tap into next year for some unexpected expenses, and I was convinced it would completely mess up my ACA subsidies. From what everyone is saying, it sounds like only the actual gains portion would count toward my MAGI, not the full withdrawal amount. That makes so much more sense than penalizing people for accessing money they already paid taxes on when they invested it. Does anyone know if there's a way to estimate what portion of my account balance would be considered gains vs. principal? I've been adding money to this account sporadically over the past 5 years, so I'm not sure how to calculate my cost basis accurately.

This is exactly the kind of confusion that keeps people from making smart financial decisions! I went through the same panic when I first learned about MAGI calculations for ACA subsidies. One thing that really helped me was understanding that the ACA treats your brokerage account withdrawals the same way the IRS does for regular tax purposes. Since you already paid taxes on the money you originally invested (your cost basis), the government isn't going to tax you again on that same money - whether for income taxes or ACA subsidy calculations. The $15,000 withdrawal you're considering will only impact your subsidies based on whatever gains you've realized, not the full amount. So if you invested $12,000 over time and it grew to $15,000, only that $3,000 gain would count toward your MAGI. Just make sure you understand which investments you're selling if you have multiple purchases at different prices. Some brokers default to "first in, first out" while others let you choose specific lots, which can affect your tax implications. Worth checking with your broker about their default method before you make the withdrawal!