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    New Investment Tax

    ...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."

    #2
    Worth

    Originally posted by Snaggletooth View Post
    ...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?
    Always cite your source for support to defend your opinion

    Comment


      #3
      (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%).
      Roland Slugg
      "I do what I can."

      Comment

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