A Couple Holds $120K in Bitcoin.
In a Roth It’s Tax-Free
In a Brokerage Account, Selling Could Torpedo Their Social Security. Quick Read – Selling Bitcoin held in a brokerage account can push provisional income past $44,000, making up to 85% of Social Security benefits taxable. – The same Bitcoin sale in a Roth IRA produces zero impact on provisional income, Social Security taxation, or Medicare premiums. – A single oversized brokerage sale can also trigger Medicare IRMAA surcharges, potentially raising Part B premiums to $689.90 per month per person for a full year. – Picture a married couple, both around 65, just starting Social Security. They bought Bitcoin years ago and now sit on roughly $120,000 worth.
The question is when and how to sell without blowing up their retirement income. Where that Bitcoin lives matters enormously. Inside a Roth (a self-directed or crypto IRA, since standard custodians often will not hold it), future sales are tax-free and never appear on the tax return.