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% Medicare surtax, that will impact estate and trusts, starting in 2013.
For tax years beginning after 2012, new Internal Revenue Code (IRC) section 1411 imposes a 3.8 percent surtax on certain passive investment income of individuals and of trusts and estates based on a mathematical formula. To assist in planning to minimize the impact of the tax on estates and trusts, practitioners should understand what income it applies to and how the tax is calculated.
This page contains resources for members to better assist their clients in planning for the 3.8% Medicare surtax and its impact on trusts and estates. It includes links to webinars that cover the new tax and estate and trust income, avoiding gains on funding, the timing of distributions, proper investments to avoid the surtax and more. We appreciate the contributions from Robert Keebler, an AICPA member who developed many of these resources and is making them available to our members.
Proposed regulation on net investment income tax (11/30/12)
Proposed regulation on additional medicare
on Net Investment Income Tax (11/30/12)