Source: http://csrbenefits.com/2013/11/04/health-insurance-subsidy-calculator-uses-modified-adjusted-gross-income/
Timestamp: 2019-04-26 06:48:50+00:00

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The magic number needed for those seeking to receive assistance with their new health insurance premiums under the ACA (also known as “Obamacare”) is not simply one’s household income. It is defined as something called “Modified Adjusted Gross Income”. This number does not appear as a line item on your typical IRS tax return; but is calculated using a formula created by the IRS.
The intended purpose of the Health Insurance Marketplace, or Exchange, that has been so heavily reported in the news, is to allow individuals who are now required by law to purchase insurance to receive tax credit subsidies to reduce the premium costs for that policy. Families with household incomes up to 400% of poverty level can receive some sort of subsidy and the purpose of registering on-line with the government website was, in-part, to determine eligibility.
OR you can do the following alternative computation.
If there are capital gains/losses from passive activities, use method above.
The MAGI includes non-passive losses and non-passive income on the back of Schedule E.
Net income from self-rented property or net income from leased land, which are non-passive, increase MAGI.
Rental losses allowed for real estate professionals do not reduce MAGI.
You can tell if the taxpayer is a real estate professional via the last line on the back of Schedule E.
If there is an overall loss after considering current and suspended losses against gain on disposition, the loss is non-passive. See IRC § 469(g). Thus, it enters into the modified AGI computation, and will reduce income, just as another non-passive loss would. Stated differently, both the income and the losses enter into the MAGI computation.
If there is an overall gain after considering current and suspended losses against gain on disposition, neither the gain nor the losses should be considered in computing MAGI. The reason is because the net gain constitutes passive income under Reg. §1.469-2T(c)(2).
The deduction equivalent of the rehabilitation credit is phased out beginning at $200,000 of MAGI. Even a limited partner may take the rehabilitation credit. There is no participation requirement for the low income housing credits (LIHC), rehabilitation credits, or for the commercial revitalization deduction. See IRC § 469(i)(6)(B).
There is no phaseout range for the LIHC, i.e. any taxpayer can take the LIHC, including a limited partner. See IRC § 469(i)(3)(c)(D). Furthermore, for both the rehabilitation credit and LIH, even a limited partner may use the $25,000 offset. Both of these credits impact FORM 8582-CR, not Form 8582.
A real estate professional, who materially participates in each rental (including LIH and rehabilitation activities) may deduct all current losses without limitation. However, even if the taxpayer is a real estate professional, many LIH and rehabilitation interests are owned via a limited partner interest; thus losses from these activities generally will still be subject to the same passive loss rules. For rental losses which are allowed by virtue of the real estate professional rules, those losses increase MAGI. Thus, raising the amount and very possibly limiting the amount of $25,000 offset available. See IRC § 469(i)(3)(E)(iv).
There are special rules for taxpayers who file married filing separately. See IRC § 469(i)(5).
There is no phaseout for the commercial revitalization deduction. See IRC § 469(i)(3)(c).

References: § 469
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