Reply To: Net Investment Income Tax

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Based upon what Kaye Thomas has said, I believe the amount that you start with in allocating state income tax to Net Investment Income for a particular year is simply the total of state income tax payments you have entered on line 5a of Schedule A for that year.

If the resulting allocation is more than $10,000, it must be reduced to $10,000.

There would be only one allocation.

It looks to me like the only way the before-and-after method would be feasible is if the state income tax paid in a particular year = the tax incurred for that year.