Question

Logan's modified adjusted gross income is $235,000. He is single. His net investment income is $50,000....

Logan's modified adjusted gross income is $235,000. He is single. His net investment income is $50,000. What is his net investment income tax?

$0

$760

$1,330

$1,900

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Answer #1

PLANNING FOR THE NET INVESTMENT INCOME TAX

August 22, 2019

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You’re potentially liable for the NII tax if your modified adjusted gross income (MAGI) exceeds $200,000 ($250,000 for joint filers and qualifying widows or widowers; $125,000 for married taxpayers filing separately). Generally, MAGI is the same as adjusted gross income. However, it may be higher if you have foreign earned income and certain foreign investments.

To calculate the tax, multiply 3.8% by the lesser of 1) your NII, or 2) the amount by which your MAGI exceeds the threshold.

Net investment income tax is 3.8%*(235,000-200000)

=3.8%*35,000

=$1,330

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