The short answer
Yes, a taxable sale can raise your Medicare Part B and Part D premiums for one year, two years after the sale. The income-related monthly adjustment amount (IRMAA) is based on modified adjusted gross income, which is AGI plus tax-exempt interest, generally from the tax return two years before the premium year. A fully deferred 1031 exchange keeps the gain out of AGI, so it does not count; any boot you receive does. Social Security will not reset the surcharge for a sale, because a voluntary sale is listed as a non-qualifying event.
At a glance
| Look-back | Premiums generally use the tax return from two years earlier |
|---|---|
| Income measure | AGI plus tax-exempt interest |
| 2026 threshold | $109,000 single, $218,000 joint |
| 2026 top tier | $750,000 or more joint: $689.90 Part B premium per person |
| Life-changing event | Voluntary sale and capital gains do not qualify |
| Fully deferred exchange | Gain not recognized, so not in AGI |
| Boot | Recognized gain counts in AGI and in IRMAA |
IRMAA is priced off a two-year-old tax return
Social Security's operating manual, POMS HI 01101.010, defines the income measure as adjusted gross income plus tax-exempt interest, and says the information 'is from two years prior to the year for which the premium is being determined'. Its own example: '2026 premiums are generally based on 2024 tax return information.'
A rental sold in 2026 therefore shows up in 2028 premiums. If you are 63 now and plan to enroll at 65, the sale year is the year that sets your first premium.
The surcharge applies to both Part B and Part D, and it is assessed per person. A married couple both on Medicare pays it twice.
The 2026 brackets show how steep each step is
The CMS 2026 fact sheet sets the standard Part B premium at $202.90 a month. Joint filers pay no surcharge at $218,000 or less, then step to $284.10, $405.80, $527.50, $649.20 and, at $750,000 or more, $689.90 per person. Single filers cross the first line at $109,000 and the top line at $500,000.
Part D surcharges are added separately, from $14.50 to $91.00 a month in 2026. The brackets are cliffs: one dollar over a line moves you into the whole next tier.
Married people who lived together and file separately are treated more harshly, with the second-highest Part B tier starting just above $109,000.
A sale is not a life-changing event, so the surcharge sticks for that year
You can ask for a new determination after a life-changing event using form SSA-44, but POMS HI 01120.005 says the list of eight events 'is exclusive'. It names 'voluntary sale of income-producing property' as a non-qualifying event and lists 'capital gains from the sale of property' as one-time income that does not qualify.
Loss of income-producing property counts only when it is beyond your control, such as a natural disaster, arson or criminal theft. POMS HI 01120.035 adds that a loss 'due to donation, gift, sale or transfer' does not qualify.
Once the sale year's MAGI is on file, the only relief is that the next year's premium uses the next year's return.
The practical effect is that the surcharge is a one-year cost per sale year. It is largest for owners whose income normally sits below the first threshold, because the sale moves them from no surcharge to one of the upper tiers, and smaller for owners who already pay a surcharge every year.
Worked example: a $400,000 gain on a joint return
Hypothetical; 2026 brackets used as a stand-in because 2028 figures are not yet published; run your own numbers with your CPA. A married couple, both on Medicare, normally report $180,000 of MAGI. They sell a rental in 2026 with a $400,000 gain, lifting 2026 MAGI to $580,000.
At 2026 rates that puts each spouse in the $410,000 to $750,000 tier: $446.30 a month of Part B surcharge plus $83.30 of Part D, about $6,355 per person and $12,710 for the couple for the year.
Exchange the whole property and MAGI stays at $180,000, with no surcharge. Take $100,000 of boot and MAGI lands at $280,000, about $2,885 per person at 2026 rates. The income tax on the gain is a separate cost; see what tax you owe selling a rental without a 1031.
Where the exchange and what you buy change the answer
Deferral works because section 1031 says no gain is recognized on a qualifying exchange, so nothing reaches AGI. Recognized boot is income in the sale year, which is why leftover cash after an exchange costs more than its tax rate for Medicare enrollees.
The replacement's own income still counts each year. A Delaware Statutory Trust interest passes through rental income that lands in AGI like any rental, so ask how much taxable income the offering is expected to report; the zero cash flow DST explainer covers a structure built differently.
If you are selling rather than exchanging, an installment sale under section 453 can spread the gain so fewer years cross a bracket.
Related questions
Does a sale in 2026 affect my 2026 Medicare premium?
No. 2026 premiums generally use 2024 returns, so a 2026 sale shows up in 2028 premiums.
Can I appeal the surcharge on form SSA-44 because the sale was one-time?
Not on that basis. Social Security's manual treats capital gains from a property sale as a non-qualifying event, and its list of qualifying events is exclusive.
Does depreciation recapture count toward IRMAA?
Yes. Any recognized gain, whether taxed at the 25% recapture rate or the capital gain rates, is part of AGI.
Does the 3.8% net investment income tax affect IRMAA?
No, it is a separate tax. The same sale can trigger both; see whether NIIT applies to your rental sale.
Will the surcharge come back when I sell the replacement later?
Yes, if that later sale is taxable. Deferral moves the gain to a later year rather than erasing it, unless the property is held until death; see is a 1031 tax-free or deferred.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.