The net investment income tax (NIIT) is a tax on net investment income. Those who are subject to the tax will pay 3.8 percent on the lesser of the two: their net investment income or the amount by which their modified adjusted gross income (MAGI) exceeds certain thresholds. The tax applies to individuals, estates, and trusts, and it is separate from the capital gains tax.
This year's New York art auctions disappointed. The $1.4 billion in spring sales were 22 percent lower than 2023, and off 36 percent from the previous year. This decline in sales may have an impact on the net investment income tax as art sales can be considered part of an individual's investment income.
United States – IRS Appeals Decision Allowing FTC Claim Against Net Investment Income Tax · On December 18, 2023, the United States filed a case regarding the Net Investment Income Tax (NIIT). The outcome of this case could potentially impact how the tax is calculated and enforced in the future.
The Court of Federal Claims recently determined in Christensen v. United States that the Net Investment Income Tax (NIIT) is a creditable tax. This decision could have implications for individuals who are subject to the NIIT and may allow for certain tax credits or deductions related to the tax.
In brief. In Christensen v. United States, the Court of Federal Claims held that a husband and wife could credit French income taxes against the Net Investment Income Tax. This ruling demonstrates the complexities of international tax laws and how they intersect with domestic tax regulations.
The number of returns reporting the NII tax on investment has more than doubled and revenue from the tax has grown by $38 billion over the past decade. This increase in reporting and revenue indicates that more individuals are subject to the NIIT, likely due to the growth in investment income and higher MAGI thresholds.
Most taxpayers are familiar with wages at tax time. But investment income, which includes interest, dividends and capital gains, is also subject to taxation. Understanding how the NIIT applies to different types of investment income can help individuals accurately report and pay their taxes.
When you sell a security for a profit, the money you make from the sale is called a capital gain. How that money is taxed depends on what type of capital gain it is and whether it falls under the net investment income tax. Being aware of the tax implications of capital gains can help individuals make informed investment decisions.
