- NY Credits : 3.0
- TX Credits : 3.0
- IRS Enrolled Agent Credits : Federal Tax/Tax Related Matters - 3.0
- IRS Non-Credentialed Return Preparer Credits : Federal Tax - 3.0
Net Investment Income Tax
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. The threshold amount for single taxpayers is $200,000, and the threshold amount for taxpayers who are married and filing jointly is $250,000. Interest, dividends, capital gains, and rental income are some of the income types that are included in net investment income. Since the tax may impact you or your clients, it is critical that you understand it. This basic-level course will examine the tax and discuss the three categories of net investment income, the potential for tax on that income, and how the choice of entity can affect the tax calculations. This course is most beneficial to professionals new to the net investment income tax. These individuals are often at the staff or entry level in an organization, although this course may also benefit a seasoned professional with limited exposure to the net investment income tax. This course has been updated to include the relevant tax provisions of the Tax Cuts and Jobs Act of 2017.
Upon successful completion of this course, the user should be able to:
define the three categories of net investment income and the types of gains and losses subject to net investment income tax,
describe the passive activity rules and how passive activities affect net investment income,
describe the impact that choice of entity has on the self-employment and net investment income taxes, and
allocate expenses properly to the three categories of net investment income.