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

A married couple, both 66, holding $600,000 of long-term gains in Micron Technology (NASDAQ:MU | MU Price Prediction) and Oracle (NYSE:ORCL) faces one big timing question. They can take the whole gain in tax year 2026, or they can spread it over several years. Below, the federal tax and Medicare math for each path is worked out with 2026 IRS and Medicare figures.

Two AI Stocks Heading Into Year-End on Very Different Paths

These two holdings have done very different things over the past year. Micron traded at $710.72 on November 10. That is down 30.92% over the past month and 14.74% over the past week. Even so, the stock is up 199.07% over the past year and 4026.1% over ten years. The business is booming: fiscal Q4 2026 revenue rose 379.3% to $54.23B. Barron’s still ran a headline today saying the stock dropped again.

Oracle has had a much rockier year. At $116.85, it is down 17.36% over the past month and 50.51% over the past year. Its ten-year gain of 243.69% is the only reason a buyer from a decade ago still has a gain. Remaining performance obligations reached $664B, but free cash flow came in at -$5.40B after $28.5B of capex. The WSJ reported the stock sliding as the AI trade swoons.

Both positions were bought a decade or more ago. That makes the gains long-term, because the law defines a long-term gain as one on an asset held more than 1 year (26 U.S.C. § 1222(3)). Both companies also depend on the same AI infrastructure expansion. So the couple’s concentration risk is larger than two tickers suggest.

Assumptions Behind the Math

The couple files jointly and holds both stocks in a taxable brokerage account. We assume $100,000 a year of other income that counts toward adjusted gross income, such as pensions, IRA withdrawals and taxable Social Security. We use the base 2026 joint standard deduction of $32,200. The extra deductions for taxpayers 65 and older are left out to keep things simple. Including them would lower the bill a little.

For tax year 2026, joint filers pay 0% on long-term gains up to $98,900 of taxable income and 15% up to $613,700. Gains above that are taxed at 20%. On top of that, the net investment income tax (NIIT) adds 3.8%. It applies to whichever is smaller: net investment income, or modified adjusted gross income (MAGI) above $250,000 for joint filers (26 U.S.C. § 1411(a)(1) and (b)(1)). After the standard deduction, the couple’s ordinary income leaves $31,100 of room in the 0% band.

Option 1: Sell Everything in Tax Year 2026

Taking the full gain this year pushes taxable income to $667,800. Here is how the gain gets taxed:

• $31,100 at 0%
• $514,800 at 15%, which is $77,220
• $54,100 at 20%, which is $10,820
• NIIT of $17,100

The total federal bill comes to $105,140. The NIIT is the largest extra cost, because almost all of the gain lands above the $250,000 threshold.

Option 2: Spread Sales Across 2026, 2027 and 2028

Here the couple sells $200,000 of gain in each of three tax years. We hold the 2026 thresholds constant for later years. Inflation adjustments would probably raise them a bit, which would help this option. Taxable income each year comes to $267,800, which stays below the 20% threshold.

• $31,100 at 0%
• $168,900 at 15%, which is $25,335
• NIIT of $1,900

That works out to $27,235 a year, or $81,705 over three years. That is $23,435 less federal tax than selling everything at once.

Medicare Surcharges (IRMAA) Arrive Two Years Later

Medicare’s income-related surcharge, known as IRMAA, uses MAGI from two years prior. A 2026 sale therefore raises 2028 premiums. We use the 2026 CMS tables as a stand-in for future years. The standard Part B premium is $202.90 a month.

With the lump sale, MAGI lands in the joint bracket above $410,000 and below $750,000. Each spouse then pays $649.20 a month for Part B plus a Part D surcharge of $83.30. For the couple, that is $12,710.40 in extra premiums for one year.

With the spread, MAGI falls in the bracket above $274,000 and up to $342,000 in each of three years. The Part B premium is $405.80 and the Part D surcharge is $37.50. That costs $5,769.60 a year and $17,308.80 in total. Spreading the sales actually means paying more in Medicare surcharges.

Even after the higher Medicare cost, spreading comes out $18,836.60 ahead on these assumptions.

Price Risk Works Against the Tax Savings

Spreading the sales means keeping two-thirds of the position for another year or two. Micron’s 30.92% drop in a single month shows how fast an unsold gain can shrink. Micron’s president described “a very strong outlook for demand through 2028,” and the company guided fiscal Q1 2027 revenue to $61.5B ± $1.5B. Oracle shows the downside: a stock that fell 50.51% in a year has already given back much of its gain. A smaller gain means a smaller tax bill, but it also means less wealth.

Other Levers That Change the Bill

• Losses elsewhere: Net long-term capital gain is long-term gains minus long-term losses for the year (26 U.S.C. § 1222(7)). Realized losses in other holdings would lower the taxable amount under either option.
• State tax: States that tax capital gains as regular income add to the bill in both options. Residents of states with no income tax skip that level.
• Net unrealized appreciation (NUA): This rule covers only employer stock held inside a company 401(k). A Micron or Oracle employee or retiree with company shares in the plan could pay regular income tax on the cost basis when the shares are distributed, and long-term rates on the growth above it. Shares bought in a taxable brokerage account do not qualify.

What to Watch Before December 31

Sales made by year-end count toward tax year 2026. Each spouse’s 2028 Medicare premiums are tied to that year’s MAGI. Key things to track before deciding: Micron’s next earnings report against its $38.15 ± $1.00 non-GAAP EPS guidance, Oracle’s expected 30%-34% fiscal Q2 revenue growth, and the 2027 IRS and CMS threshold updates. Those updates will set the brackets for the second and third years of any spread-out plan (the NIIT and IRMAA combo above is one of nine quiet IRS rules we charted in a free tax trap map for retirees).

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