On Dec. 5, 2012, proposed regulations were published that address various aspects of the new Internal Revenue Code (IRC) section 1411, which will impose a tax on unearned income on investments. This new net investment income tax will have a substantial impact on certain individuals, as well as trusts and estates whose income is above the statutory threshold amounts.
In the case of an individual, section 1411(a)(1) imposes a tax each year equal to 3.8% the individual’s net investment income for the taxable year, or the excess of the taxpayer's modified adjusted income (MAGI) over a threshold amount.
Additionally, the Patient Protection and Affordable Care Act (P.L.111–148), (as amended by the Health Care and Education Reconciliation Act of 2010 (Pub.L. 111-152), contains a 3.8% net investment income tax for tax years beginning after 2012.
To assist in planning to minimize the impact of the tax on individuals, estates and trusts, practitioners should understand what income it applies to and how the tax is calculated. The ACIPA has been continually offering recommendations and guiding principles with respect to the final net investment income tax regulations. This page contains resources for members to better assist their clients in planning for this new tax.
- August 05, 2013 - AICPA Comments on Section 1411 NIIT Issues Related to Controlled Foreign Corporations (CFCs) and Passive Foreign Investment Corporations (PFICs)
- August 01, 2013 - AICPA Comments on Section 1411 NIIT Issues Related to Section 736 Partnership Payments
- June 17, 2013 - AICPA Comments on the Section 1411 NIIT Proposed Regulations
- May 08, 2013 - AICPA Comments on the NIIT Proposed Regulations for Trusts and Estates.
- February 4, 2013 - AICPA Comments on the Paperwork Reduction Act and NIIT Proposed Regulations Under Section 1411
AICPA Upcoming & Archived Webcasts:
Other Relevant Resources:
Resources on Estate and Trust Impact:
We will continue to keep you informed as IRS releases expected guidance on this issue.