New Investment Tax

[Snaggletooth]

...actually it went into effect in 2014 and I had a few wealthy taxpayers have to pay it.

Scrooge has the following income:
1. Interest $5,000.
2. Dividends $20,000 (of which $18,000 are "qualifying" dividends).
3. Net Rental Income $30,000 ($36,000 attributable to current yr, $6,000 of previously disallowed losses).
4. K-1 from 100% owned S-corp $150,000 ordinary income.
5. K-1 from partnership, $20,000 of guaranteed payments, $15,000 in ordinary income.
6. K-1 from limited partnership $7,000.
7. LTCG from sale of land $180,000.

How much should Scrooge report as "Net Investment Income" (Form 8960, Line 12)?
a. $263,000
b. $277,000
c. $257,000
d. $407,000
e. $255,000
f. none of the above

p.s. Just because I asked the question doesn't mean I know the answer. My guess is "c."

[TAXNJ]

Worth

...actually it went into effect in 2014 and I had a few wealthy taxpayers have to pay it.

Scrooge has the following income:
1. Interest $5,000.
2. Dividends $20,000 (of which $18,000 are "qualifying" dividends).
3. Net Rental Income $30,000 ($36,000 attributable to current yr, $6,000 of previously disallowed losses).
4. K-1 from 100% owned S-corp $150,000 ordinary income.
5. K-1 from partnership, $20,000 of guaranteed payments, $15,000 in ordinary income.
6. K-1 from limited partnership $7,000.
7. LTCG from sale of land $180,000.

How much should Scrooge report as "Net Investment Income" (Form 8960, Line 12)?
a. $263,000
b. $277,000
c. $257,000
d. $407,000
e. $255,000
f. none of the above

p.s. Just because I asked the question doesn't mean I know the answer. My guess is "c."

How much is the answer worth?

[Roland Slugg]

(f) None of the choices offered.

His "Net Investment Income" consists of all the income listed except for the S Corp income, $150,000, and the general partnership income, $35,000 ($20,000 + $15,000). Thus, his Net Investment Income is $242,000.

His net investment income tax, however, is 3.8% of a slightly smaller amount ... $227,000 ... which is his AGI, $427,000, less the flat $200,000 exemption, and the net investment income tax is $8,626 ($227,000 x 3.8%).