Gold Has Fallen Roughly $400 an Ounce Since August. The Retiree Who Sold at the Top Still Owes Medicare on the Top, in 2028
A retiree who sold 100 ounces of gold near the peak watched the price drop hundreds of dollars per ounce afterward, but the IRS and Medicare see none of that loss, and the bill arriving in 2028 will reflect the…
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Picture a 72-year-old who accumulated 100 ounces of physical gold over two decades at an average cost of $1,800 an ounce. He sold the whole position in late August at roughly $4,700 an ounce. Proceeds: about $470,000. Simplified taxable gain: about $290,000.
Gold has since retreated. The metal traded at $4,683.72 on August 25 and sat at $4,298.75 on the afternoon of September 15. Had he waited, the same 100 ounces would fetch roughly $40,000 less today. That drop changes nothing about his 2026 tax return, and nothing about what Medicare will charge him in 2028.
Only about 8% of Medicare beneficiaries pay any IRMAA surcharge at all, so a retiree well below the first bracket can move on. The math below matters for anyone sitting on large embedded gains in physical bullion, coins, or a gold ETF that holds the metal directly, with enough other retirement income that one big sale can push modified adjusted gross income (MAGI) into a higher Medicare tier.
Sale Price Locks the Gain, Full Stop
Under IRC code 1001, gain equals sale proceeds minus adjusted basis and selling expenses, measured on the day the sale closes. A market decline the following week does not reopen the transaction. The IRS records the price he actually received.
Medicare uses the same number. Its income-related surcharges start from the adjusted gross income on his federal return, which now carries the full realized gain.
Physical Gold Carries Its Own Tax Rate
Long-term gains on physical bullion and coins are taxed as collectibles gains, with a maximum federal rate of 28% rather than the 20% ceiling that applies to most long-term capital gains. The mechanics come from IRC §1(h), with IRC §408(m) classifying precious metals as collectibles. Held a year or less, the gain runs through ordinary income rates instead.
This treatment does not extend to every gold instrument. Futures, mining shares, and certain fund structures follow different rules, and gold held inside an IRA is taxed on distribution rather than on sale. Check the wrapper before assuming the collectibles rate applies.
How a 2026 Sale Reaches a 2028 Medicare Bill
Social Security uses a two-year lookback on modified adjusted gross income to set the Part B and Part D surcharges known as IRMAA. His 2026 return, filed in 2027, sets his 2028 premiums. CMS has not yet published the 2028 thresholds or premium amounts.
For scale, the 2026 rules charge a single filer with MAGI at or above $500,000 the top Part B surcharge of $487.00 per month, taking the total Part B premium to $689.90, plus a Part D surcharge of $91.00 per month. Roughly $6,940 a year in Medicare surcharges alone, for one person, for one year at the top tier.
The retiree’s $290,000 gain stacks on top of taxable Social Security, pension income, RMDs, and interest. Depending on his other income streams, one asset sale can lift him through one or several IRMAA tiers. The brackets function as cliffs, so a single dollar above a threshold triggers the full next surcharge (we mapped the surcharges and the other premium traps retirees walk into in a free Medicare guide here: Medicare’s Hidden Bills).
Falling Price Does Not Rescue Him
The market can erase part of gold’s value after the sale without erasing a dollar of income from the completed transaction. He cannot claim a loss because a former holding got cheaper. Buying gold back at today’s $4,298 starts a new position with a new basis, unrelated to his 2026 return.
Form SSA-44 will not help either. It applies only to income drops from qualifying life-changing events: marriage, divorce, death of a spouse, work stoppage or reduction, loss of pension income, loss of income-producing property, and a short list of others. A voluntary asset sale followed by a market decline is not on that list, and Social Security will not treat it as one.
Two Moves That Actually Matter
- First, reserve cash for the federal and state tax on the $290,000 gain and the potential 2028 IRMAA surcharge. The Medicare cost is easier to overlook because it arrives well after the sale and often appears silently in the monthly Social Security deduction.
- Second, before any future gold transaction, estimate how the gain will affect MAGI, using the latest published IRMAA brackets as a guide. Splitting a sale may keep each year’s income in a lower tier, but it can also create surcharges in two Medicare years instead of one. Compare the total cost across both years before breaking up the sale.
Gold gave back about $400 an ounce after he sold. His 2026 tax return gave back nothing, and that is the number Medicare will read in 2028.
Contact [email protected] for any questions or corrections.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
