Net Investment Income Tax

Home Fairmark Forum Taxation of Investments Net Investment Income Tax

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  • #5266

    To Kaye Thomas:

    In my thread of a year ago, you explained that no more than $10,000 in state income taxes can be deducted on Form 8960 because of the new $10,000 limitation on the “taxes” deduction on Schedule A, along with the language of Reg. 1.1411-4 (pertaining to the NIIT) and subtitle A (pertaining to the general income tax).

    Was this an unintended consequence of the new $10,000 “taxes” limitation on Schedule A, and, if so, is there any chance the limitation might be removed from the NIIT calculation?

    (Comments from others, besides Kaye, welcomed as well.)


    The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

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