How Much Tax Does a 66-Year-Old Owe Selling $600,000 in Micron and Oracle Gains?

Key points

• The couple holds $600,000 of long‑term gains in Micron Technology and Oracle in a taxable brokerage account, filing jointly.
• Option 1 (sell all in 2026): taxable income hits $667,800 after the standard deduction, yielding $105,140 in federal tax plus $17,100 NIIT, for a total of about $122,240; the NIIT drives the bulk of the extra cost because gains exceed thresholds.
• Option 2 (spread across 2026–2028): selling $200,000 per year keeps taxable income around $267,800 annually, producing about $27,235 per year in tax (including a $1,900 NIIT) and $81,705 over three years; this is roughly $23,435 less federal tax than the lump sale.
• Medicare IRMAA surcharges are calculated two years later; a lump sale drives higher premiums than spreading, with total extra premiums around $12,710 in the lump case versus about $17,309 over three years for the spread.
• Even after higher Medicare costs, the spread-out plan remains ahead by about $18,800 under the given assumptions, though it requires holding two-thirds of the positions longer and risking price declines.
• Price risk is highlighted: Micron fell about 31% in a month, while Oracle dropped about 51% over a year, illustrating how unsold gains can shrink quickly and affect wealth.
• Other levers include potential state taxes, additional capital losses, and the possibility of net unrealized appreciation (NUA) considerations; year-end sales and future threshold updates will influence the second and third-year brackets.