RitaB Posted May 13, 2021 Report Share Posted May 13, 2021 Does gain on the sale of a business asset count toward the earnings limit for someone retiring prior to full retirement age? I've got a guy about to start drawing SS benefits at age 62. His net income on Sch C will be under the annual earnings limit, but he will most likely sell depreciated equipment. I was pretty certain only the Sch C earnings will count. But, I started thinking that gain from depreciation recapture is Qualified Business Income, so now I'm not so sure. Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted May 13, 2021 Report Share Posted May 13, 2021 Good question. If i am not mistaken, SSA will look at the amount reported on the Schedule SE for earnings from self-employment and therefore the recaptured gain/capital gain will not count against what he can earn for social security purposes. But I am not sure. 7 Quote Link to comment Share on other sites More sharing options...
RitaB Posted May 13, 2021 Author Report Share Posted May 13, 2021 2 hours ago, Gail in Virginia said: Good question. If i am not mistaken, SSA will look at the amount reported on the Schedule SE for earnings from self-employment and therefore the recaptured gain/capital gain will not count against what he can earn for social security purposes. But I am not sure. Yes, that was my first thought, too, and Sch E income can be Qualified Business Income, and that's not earnings for this purpose, so my second thought may just be a rabbit hole. I'm so tired. There was a knock on my door 45 seconds after I got home last night, and it was my butt. 2 1 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted May 14, 2021 Report Share Posted May 14, 2021 16 hours ago, RitaB said: Yes, that was my first thought, too, and Sch E income can be Qualified Business Income, and that's not earnings for this purpose, so my second thought may just be a rabbit hole. I'm so tired. There was a knock on my door 45 seconds after I got home last night, and it was my butt. This remind me of a song that came out when I was in high school lol 2 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted May 14, 2021 Report Share Posted May 14, 2021 The asset sales aren't included. Here is what I found for the SSA's Code of Federal Regulations to determine what is earned income. Also, keep in mind that in the year of retirement, I believe that only the earned income through the end of the month preceding retirement is counted. Here's that first link: https://www.ssa.gov/OP_Home/cfr20/416/416-1110.htm And here is the link to that same Code of Fed Regs for 404.1080 that is referenced in the first page: https://www.ssa.gov/OP_Home/cfr20/404/404-1080.htm 2 Quote Link to comment Share on other sites More sharing options...
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