Net Investment Income Tax

Home Fairmark Forum Taxation of Investments Net Investment Income Tax

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  • #5266
    wanttoknow
    Participant

    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.)

    #6628
    Lewis-H
    Participant

    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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