Use Form 8960 to figure the amount of Net Investment Income Tax (NIIT) when modified adjusted gross income (MAGI) is greater than the applicable threshold amount below.
U.S. citizens and residents. Individuals who have for the tax year (a) modified adjusted gross income (MAGI) that is over an applicable threshold amount, and (b) net investment income, must pay 3.8% of the smaller of (a) or (b) as their NIIT.
The applicable threshold amount is based on your filing status:
- Married Filing Jointly or Qualifying Widower with Dependent Child is $250,000,
- Married Filing Separately is $125,000, or
- Single or Head of Household is $200,000.
Passive Activities. Net investment income generally includes income and gain from passive activities. A passive activity for purposes of net investment income has the same meaning as under section 469. A passive activity includes any trade or business in which you do not materially participate. A passive activity also includes any rental activity, regardless of whether you materially participate.
Real Estate Professionals. If you are a real estate professional for purposes of section 469(c)(7), your rental income, or loss will not be passive if you materially participated in the rental real estate activity. Rental income is included in net investment income if the income is not derived in the ordinary course of a trade or business. Qualifying as a real estate professional does not necessarily mean you are engaged in a trade or business with respect to the rental real estate activities. If your rental real estate activity is not a section 162 trade or business or you do not materially participate in the rental real estate activities, the rental income will be included in NIIT.
Accessing Form 8960 in TaxSlayer ProWeb: To access Form 8960 in TaxSlayer ProWeb, from the Federal Section of the tax return, select:
- Other Taxes
- Net Investment Income Tax (Individuals, Estates & Trusts)
Net Investment tax is automatically calculated by the program. Enter any adjustments to income and any additional expenses allocable to investment income in the fields provided.