The Net Investment Income (NII) tax is an additional tax on high-income individuals with investment income and modified adjusted gross income over threshold amounts. Trusts and estates with investment income and adjusted gross income over a threshold amount are also subject to the NII tax. The NII tax rate is a flat 3.8%. While the tax rules for the NII tax have not been changed by recent legislation, it is having an ever-growing effect because threshold amounts are not adjusted for inflation. This CPE course provides you with an overview of the special concerns for the NII tax and planning opportunities to minimize or avoid the tax.
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN cardPublication Date: February 2025
Designed For
CPAs, Enrolled Agents, Tax Return Preparers
Topics Covered
- Overview of NII Tax, including the threshold amounts
- What is included in the NII tax and what is not
- The impact of the NII on a trade or business
- Passive activity income
- Special rules that apply to net operating losses
- Calculating the NII Tax
- Special Concerns for Trusts and Estates
- How undistributed net investment income of a trust or estate impacts the NII tax
- Figuring the NII tax for an ESBT
- Special reporting for trusts and estates on Form 8960
- Planning strategies for minimizing taxable investment income and MAGI
Learning Objectives
- Explain the computation of the NII tax
- Identify the reporting rules for the NII tax
- Identify special rules for trusts and estates
- Identify the form individuals who are subject to the NII tax use to figure the tax
- Explain planning strategies to avoid or minimize the NII tax
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Taxes (1 hour)
Program Prerequisites
None
Advance Preparation
None
Instructor
Barbara Weltman
Barbara Weltman, JD, has written extensively on a wide variety of tax, small business, and financial planning matters for both professionals and the general public. The Wall Street Journal called her “the guru of small business taxes.” She is the author of a number of self-study programs for CCH. She is publisher of Big Ideas for Small Business® and Idea of the Day® found at www.BigIdeasForSmallBusiness.com and is a guest blogger for the SCORE and many other sites. Ms. Weltman is a graduate of Brooklyn Law School.