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Special Report

UNDERSTANDING THE 3.8% NET INVESTMENT INCOME TAX

The NIIT is a 3.8% tax that applies to individuals, estates and trusts that have certain investment income above applicable threshold amounts. On its surface, the NIIT sounds simple enough, but like everything else the devil is in the details – and there are a lot of details in this regulation.

This Special Report covers the final regulations and the 2013 proposed regulations, including some of the key differences between the 2012 proposed regulations and the updated rules. The difference may determine which set of regulations should be followed when preparing 2013 returns for affected clients.

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Related CPE

Net Investment Income Tax

Online Course | 3 CPE | $48 or
FREE for Premier & Premier Plus Subscribers*

The Net Investment Income (NII) Tax went into effect starting on January 1, 2013. The Health Care and Education Reconciliation Act of 2010 added new Section 1411 to the Internal Revenue Code, and the IRS released a proposed regulation in December 2012 that is about 150 pages long. The 3.8 percent NII tax applies to individuals, estates, and trusts that have certain investment income above statutory threshold amounts ($200,000 single and $250,000 married filing jointly). Interest, dividends, capital gains, and rental income are some of the income types that are included in NII. This basic-level course will examine the new tax and discuss the three categories of NII, the potential for tax on that income, and how the choice of entity can affect the tax calculations.



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