Reply To: Net Investment Income Tax

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The instructions to Form 8960 say the starting point for the allocation of SALT is “State, local, and foreign income taxes if properly deducted on your return when calculating your U.S. regular income tax.” Use of the word “deducted,” rather than “deductible,” seems to suggest the deduction is not available for NIIT if the standard deduction is used. I have found no authority in the Code or Regulations supporting this conclusion. However, since for 2019 the maximum amount of the NIIT tax savings would be $380, I decided I had wasted enough time on this and will not take the deduction. BTW this is the TurboTax program’s approach.