Wanttoknow – Thanks for the reply and I believe we are in agreement. My post also made the point that separate calculations would be required in allocating state taxes to investment income for the two different tax years. Regardless of the allocation method, the allocation percentages would likely be different for the two tax years. However, it’s also possible that the $10,000 limit may simplify the calculations.
My net investment income tax is currently based on AGI minus the threshold but I wanted to understand the alternate calculation for future reference.