What is Net investment income tax?
In short
The net investment income tax is a 3.8% tax on the lesser of an individual's net investment income or the amount by which modified adjusted gross income exceeds $200,000 ($250,000 for married couples filing jointly).
Key takeaways
- Investment income includes interest, dividends, capital gains, rents and passive business income.
- The thresholds are not indexed for inflation.
- Distributions from qualified retirement plans and individual retirement accounts are not investment income for this tax.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
The net investment income tax applies at a rate of: