Net Investment Income Tax
Beginning with 2013 tax year, individual taxpayers and trusts with Modified Adjusted Gross Income (MAGI) above certain thresholds will be subject to a 3.8% income tax surcharge on net investment income over the threshold. The thresholds for individuals are $250,000 married filing joint, $125,000 married filing separately, $200,000 single and head of household. The Trust threshold is $11,950 of net annual income. There are three defined categories of income that are subject to the net investment Income Tax:
Category I – Gross income from interest, dividends, rents, royalties and non-qualified annuities.
Category II – Other gross income from businesses that are in the business of trading financial instruments or commodities and businesses that are passive activities.
Category III – Net gain attributable to the disposition of property other than property held in a trade or business (unless the property is used in a passive activity).
If you would like to discuss this Net Investment Income Tax and how it may pertain to your particular tax situation, please contact our office.
|
|